Actis buys 70% stake in Sinai Marble(3)

Actis has bought a majority stake in Sinai Marble in the same month as the Abraaj-led consortium carried out a record deal in Egypt. The smaller deal, in partnership with a family run business, is far more representative of deals in the region.

Emerging markets buyout firm Actis has bought a 70 percent stake in Egyptian marble exporter Sinai Marble for an undisclosed sum.

Murray Grant, partner, Actis, said his company had bought the shares and provided expansion capital for the deal with $24 million although he would not disclose the distribution.

The buyout firm will retain the company’s chief executive and chairman Medhat Moustafa, who holds the other 30 percent stake of the company.  

The investment was made through Actis’ second African fund and the Canada Investment Fund for Africa which is jointly managed by the buyout firm and emerging market buyout firm Cordiant.

The buyout firm said in a statement it intended to fund Sinai Marble’s expansion plans to increase the company’s two quarries to seven and to introduce different colours of marble to its product range.  It also intends to build a marble processing plant in Egypt’s Badr industrial city in order to triple product capacity.

Grant said ”Egypt is one of the strategic countries in our footprint based on its large domestic population, its manufacturing sector, its provision of services and its able technocratic government who are businessman not politicians in the main.”

The deal comes after an Abraaj-led consortium bought the Egyptian Fertilizers Company for $1.41 billion in a record inter-MENA deal, as the second largest deal in the entire MENA region.

But Grant said the majority of deals in the region will be smaller than the Abraaj deal, as buyout firms will aim to institutionalise family firms through consolidation to create capital efficiency gains. “Against this background it is inevitable there will be winners and losers between the local visionaries who realise to reach long-term sustainable positions they need to grow and those who don’t,” he added.

Actis has $3.4 billion (€2.5 billion) under management, and more than $1 billion of these assets are in Africa.