US$ 80 million deal sees ASEC Holding increase its exposure to what will become one of the region's largest independent cement producers
ASEC Holding, Citadel Capital’s Platform Company in the regional cement production, engineering and construction industries, announced today that it has acquired an additional 9.48% of ASEC Cement, one of its key Portfolio Companies, in a deal worth US$ 80 million in cash and shares.
The transaction will see ASEC Holding raise its stake in ASEC Cement to 61.04%. The selling party is the Emirates International Investment Company (EIIC), a long-time limited partner in a number of Citadel Capital’s Opportunity Specific Funds (OSFs) and a shareholder in the firm.
“This transaction values ASEC Cement at EGP 14.68 per share against a par value of EGP 10, a fair price for both parties that reflects ASEC Cement’s outstanding growth potential as it moves steadily toward controlling over 12 million tons of production capacity per year by 2013,” noted Citadel Capital Managing Director and Co-Founder Hisham El-Khazindar.
As part of EIIC’s exit of ASEC Cement, Citadel Capital S.A.E. (CCAP.CA on the Egyptian Stock Exchange) will record revenues of US$ 880,000 as a carried interest on the transaction. Citadel Capital earns revenues in three ways: Through capital gains on its principal investments; through management fees on the equity it has under control; and through a carried interest over a hard hurdle on capital gains it makes at exit for the limited partners in its OSFs.
The deal will be partly financed through the issue of ASEC Holding shares to EIIC in the amount of US$ 32.5 million via a capital increase at a fair market value of EGP 28.50 per share. EIIC will continue to have exposure to ASEC Cement’s growth story through its stake in ASEC Holding. In addition to the capital increase, the Emirati firm recently acquired an additional 6% of ASEC Holding from Citadel Capital. Together with EIIC’s original shareholding, the two transactions give the Emirati company a 13.6% stake in ASEC Holding. Top shareholders of ASEC Holding presently include Citadel Capital, FHI, EIIC and Cape Collard Investments.
ASEC Cement’s production assets are on track to span five countries from Algeria to Iraq-Kurdistan within the coming three years.
“Our aim in building out ASEC Cement is to create one of the largest and most efficient independent cement producers in the Middle East and Africa,” notes El-Khazindar. “We are well on our way, and EIIC’s decision to reinvest a large portion of the proceeds from its exit of ASEC Cement into ASEC Holding through a capital increase is a testament to our limited partners’ belief in this goal.”
ASEC Cement is Citadel Capital’s platform investment for cement production in the emerging cement markets of the Middle East and Africa. Created by Citadel Capital and a group of leading co-investors, ASEC Cement is growing into a leading regional cement production group that will have a combined production capacity of approximately 12 million tons per annum in 2013 spanning five countries from Algeria to Iraq-Kurdistan. ASEC Cement is a portfolio company of ASEC Holding.
Citadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity firm focusing on building regional platform investments throughout the Middle East and Africa in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity Specific Funds. Citadel Capital’s 18 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, the firm has generated more than US$ 2.4 billion in cash returns to its co-investors and shareholders, more than any other private equity firm in the region. Citadel Capital is the largest private equity firm in Africa by PE assets under management (2004-2009, as ranked by Private Equity International). For more information, please visit www.citadelcapital.com.
For further information, please contact:
Ms. Ghada Hammouda
Head of Corporate Communications
Citadel Capital (S.A.E.)
g...@qalaaholdings.com (click to reveal this email)
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