Mena private equity deals hit $2.6b
Dubai - Analysing wealth vehicles in the region, Al Masah Capital reviewed private equity activity in the Mena region.
The Middle East and North Africa region recorded private equity activity worth $2.6 billion and initial public offerings worth $914 million, according to Al Masah Capital's biannual report.
The staggering figures come on the back of a steady economic outlook for the Mena region, which is forecasted at 2.4 per cent in 2015 for oil-exporting countries.
Surveying wealth creating vehicles and funds, the International Monetary Fund recorded a growing economic landscape in the Middle East and North Africa despite a slump in oil prices and increasing regional conflicts.
Oil-exporting countries shall remain steady at 2.4 per cent in 2015, while growth in oil-importing countries will strengthen from three per cent in 2014 to four per cent in 2015, supported by the ongoing recovery in the eurozone's improved domestic confidence and more accommodating policies.
The international body also posed a growth forecast for GCC at 3.4 per cent, while non-GCC Mena countries are expected to register two per cent growth in 2015. The recent economic developments entailing robust growth in non-oil sectors in the GCC, driven by diversification strategies employed by the region's governments, will help partially offset the decline in oil prices.
Analysing wealth vehicles in the region, Al Masah Capital reviewed private equity activity in the Mena region. With 16 private equity deals worth $2,677.3 million during first half of 2015 compared to 26 deals worth $128.7 million in the year-ago period, the deal value has been higher compared to the same period of the previous year. Saudi Arabia and the UAE both witnessed the largest number of deals in the first half, while Algeria led in terms of value.
Al Masah Capital founder and chief executive officer Shailesh Dash said: "Our experience in market research suggests a pick-up in private equity activity during H2 2015 with stabilisation in oil prices, especially in consumption-led sectors such as healthcare, education, retail and food and beverage. The UAE, Saudi Arabia, Lebanon and Egypt are expected to be frontrunners in private equity activity during the second half of 2015."
Sectors like IT, retail and healthcare followed by telecom, financial services, industrial manufacturing, food and agriculture, oil and gas and media observed dynamic movements in private equity during the first half of 2015. A total of four exit deals were reported during the period, with Egypt, Jordan, Lebanon and the UAE witnessing one deal each. Of the four exit deals, two deals, worth $36.21 million, were in real estate.
In terms of fund raising activities during the period, the Mena region undertook 16 IPOs worth $914.9 million. As for size, Egypt-based industrial manufacturing firm Asec Company for Mining raised the largest amount with $150 million, followed by Saudi Company for Hardware ($134.4 million) and GB Auto in Egypt ($127.1 million). Country-wise, Egypt recorded seven IPOs, the largest during the period, followed by four in Saudi Arabia. In terms of value, Egypt and Saudi Arabia commanded IPOs worth $304.1 million and $279.7 million respectively. Financial services led in terms of volume and value, with six IPOs worth $294.5 million, followed by industrial machinery with four offerings worth $294.3 million.
Global economic activity continues to show strength. Al Masah Capital views this as substantial fuel to ignite economic growth within the Mena region, thereby providing a positive outlook for investments in major sectors such as IT, oil and gas, retail and real estate.