Abraaj Sees IPO Tripling Egypt Profit

Abraaj Capital Limited, the Middle East’s biggest buyout company, expects to earn as much as three times its initial $150 million investment in an Egyptian medical diagnostics business as profit increases 20 per cent a year.

Dubai-based Abraaj, which manages $7.5 billion, said on August 27 it had combined its Al Borg Laboratories unit with Al Mokhtabar Laboratories to create the largest medical diagnostics business in the Middle East and South Asia. The merger will help cut costs and Abraaj plans to sell its 47 per cent stake in the new company in an initial public offering in 18 to 24 months, said Ahmed Badreldin, a senior partner at Abraaj Capital.

“This business is ideal for an IPO on the Egyptian stock exchange, it has the size, it has the geographic diversification, it has the multinational element of very strong potential for growth outside of Egypt,” Badreldin, also vice-chairman of Al Borg, said in a phone interview on Wednesday. “This business will generate two and a half times to three times return on our investment in the next two years or so.”

Abraaj, founded 10 years ago, bought 77 per cent of Al Borg in 2008 for $150 million, later raising its stake to 99 per cent. It delisted the company from the Egyptian exchange in December 2010. Abraaj sold its stake in a company that owned Turkey’s largest hospital chain, Acibadem Saglik Hizmetleri & Ticaret, in December to a unit of Malaysia’s state investment company.

Mubasher