DIC makes second MENA investment

The Dubai Government-backed investment firm’s emerging markets arm has purchased a 45 percent stake in KEF, the Middle East’s first fully automated steel castings foundry.

Dubai International Captial’s emerging markets division has done its third private equity deal – its second in the Middle East – with the purchase of a 45 percent stake in steel castings maker KEF Holding.

Transaction terms were not disclosed, though DIC executive chairman and chief executive, Sameer Al Ansari, said in a statement that to secure the deal, DIC had to “fend off fierce competition from international and regional private equity firms”.

Supplying castings for valves used in the oil and gas, mining, industrial and chemical industries, KEF will provide resources and relationships beneficial to other DIC portfolio companies, he added.

The deal for 11-year-old KEF, which DIC noted is the region’s first fully automated foundry, underscores the private equity firm’s commitment to investing in regional businesses with strong growth projections and experienced management, Al Ansari said.

The sentiment was echoed by Anand Krishnan, DIC chief operating officer and acting CEO of DIC’s emerging markets division, which targets investments in the MENA region, as well as Asia, Eastern Europe and Latin America.

KEF is the division’s third portfolio company, according to its website. In March, it purchased a “significant stake” in Singapore-based yoga and wellness centre operator True Group, and in September 2007 it purchased an undisclosed sized stake in Rivoli Group, a Dubai-based luxury retailer.

DIC’s emerging markets division expects to have $5 billion in capital under management within the next two to three years, according to its website. It has helped establish Ishraq, a $150 million hospitality company that has brought Express by Holiday Inn hotels to the GCC countries; as well as Jordan Dubai Capital, a $300 million firm targeting private equity and development opportunities in Jordan; and a $500 million MENA infrastructure fund.

The division is also one of six cornerstone investors in the $15 billion aerospace conglomerate Dubai Aerospace Enterprise.