Warburg, General Atlantic buy Network International stake

The two GPs will continue to expand the firm’s global footprint, working alongside majority investor Emirates NBD as Abraaj exits firm after five-year hold.   

Warburg Pincus and General Atlantic have agreed to buy Abraaj Group’s 49 percent stake in Dubai-based payment solutions provider Network International.

Abraaj Group initially led the process to buy into the company through its Abraaj Private Equity Fund IV in 2011. Majority shareholder, banking group Emirates NBD, will continue to hold its 51 percent stake in the business following the sale. 

While no multiples were disclosed, industry sources indicate that the enterprise value of Network International is over $1 billion.

It is understood that Warburg Pincus and General Atlantic will have an equal share of Network International, and that each will acquire one seat on its board, alongside Abdulla Qassem, chairman of the group, and CEO Bhairav Trivedi.

Market sources said Warburg Pincus and General Atlantic would look to continue to expand the firm’s geographic footprint, with a particular focus on expanding its network in North Africa.

Warburg’s stake is believed to have come from its $11.2 billion Warburg Pincus Fund XI.

The investment is Warburg’s second in the MENA region following its investment in transportation firm Mercator in 2014.

A spokeswoman for the firm told Private Equity International: “We are particularly pleased that both investments involve us partnering with best-in-class local partners, with Emirates Airlines and Emirates NBD for Mercator and Network International respectively. 

“We plan to grow both businesses by a mix of organic expansion and M&A.”

Gabriel Caillaux, managing director of General Atlantic said: “We are seeing a rapid rise in consumer demand for electronic payments due to the growth in card usage, internet adoption, and smartphone penetration. Network International is well positioned for growth, as it continues to make transactions simpler, more affordable, and more reliable for the entire value chain of banks, merchants, and consumers.”

Founded in 1994, Network International is the leading payments processing group with a focus on the Middle East and Africa.

The business involves processing transactions covering online, offline and mobile payments, as well as Issuing Processing services, which facilitate payments to banks.

It also provides tech-enabled solutions to clients, which includes pre-paid and loyalty solutions, and is one of only three firms globally, to have a Principal Membership agreement with both Visa International and MasterCard.

In a statement, Qassem said: “We are thrilled to partner with Warburg Pincus and General Atlantic, two of the world's leading investment firms, as well as our existing partner Emirates NBD. We also recognise the significant contribution that Abraaj has made to the expansion of the business in the last five years.”

He added: “As Network International enters an exciting new stage in our growth and development across the Middle East and Africa, we are confident that General Atlantic and Warburg Pincus will be invaluable strategic partners given their deep expertise in the payments sector.”

Mustafa Abdel-Wadood, partner at Abraaj Group commented: “We are delighted to have worked with Network International and Emirates NBD in validating that thesis to create value and to have contributed to the development of a regional champion in the financial services and payments sectors over the last five years.”

Abraaj closed its second North Africa fund on $375m in August this year.