Patchi setting equity sale
to foreign strategic partner
Valuation of company, still underway,
is estimated at $500 million
Patchi, a family-owned manufacturer of chocolate and retailer of chocolate gifts, is preparing for a potential sale of part of its equity with Goldman Sachs and its owners with Dubai boutique advisory firm deNovo Corporate Advisors.
The value of the company, as estimated by Reuters, is at more than $500 million. The company is looking to sell one third to half of its equity, according to Reuters.
Oussama Choucair, Member of the Board at Patchi, said: “We do not aim to sell shares now, especially in light of the unstable regional economic situation.” He said that the idea is not off-the-table, but is premature. “We might get to this in the middle to long run,” he said.
A source close to the deal said that the sale is being negotiated with a non-Arab international strategic partner and is expected to close in about six months. Company valuation is still underway. No final decisions have been made and Patchi may decide against a deal, sources have reported to Bloomberg.
Patchi said: “It is not unusual for a group of the size and geographical footprint of Patchi to often work, in its normal course of business, with different advisers,” in an e-mailed statement.
Patchi was founded in 1974 by Nizar Choucair, who now serves as chairman. The company has high margins and retail exposure across the region. It has more than 140 stores across 21 countries in the Middle East, Europe, Asia, and Africa.
The company was reported to have planned a dual-listing in Dubai and London in 2009, but never went ahead with the share sale.
Patchi will build two factories in Egypt and the United Arab Emirates. Construction works for both facilities will start later this year and will be finalized in late 2017.
The UAE factory will be located in the Dubai Industry City. It will have a total built-up area of 20,000 square meters, requiring around $20 million in investment. The new factory, in addition to a small existing one, will supply the Emirati market, which comprises 32 retail shops.
The factory in Egypt will be located in an industrial city in Cairo. The total built-up area of the facility will be around 10,000 m2. Investment in the project is estimated at $5 million. Production will be dedicated to the Egyptian market, which includes nine shops.
On future plans, Choucair said that Patchi aims to tap new markets through franchise deals. It will open a retail shop in Thailand and another in Russia.
Date Posted: Feb 24, 2016