EIP fully acquires
General Cable Egypt
Deal valued at $15 million
Emerging Investment Partners (EIP) has fully acquired General Cable Egypt, said Wassim Heneine, EIP’s Managing Director.
The agreement was closed for an undisclosed sum. According to sources close to the deal, the investment included $10 million – $12 million in equity, and the rest in debt from shareholders.
The project involves expanding the production of low-voltage cables, and the possibility of introducing the manufacture of medium-voltage cables, he said.
The company generated ten to 15 percent in net profit margins on annual sales up to $20 million. Heneine said they bought the company because it is profitable and growing and boasts technical knowhow and a good management team. The construction sector in Egypt is also growing and there is an opportunity to export to African and Arab countries, he said.
The Egyptian company was owned by U.S.-based General Cable, a Fortune 500 company. General Cable’s divestment is part of its global plan to exit Asian and African markets as well as some European markets. General Cable used to run its Egyptian subsidiary from the U.S. and Spain but EIP will have a more active managerial role, Heneine said.
EIP plans to acquire other Egyptian companies in the building material sector. As an investment company EIP invests in a company and helps it grow then exits it after five to six years, he said.
Headquartered in Cairo, General Cable Egypt manufactures a wide variety of wire and cable products for the electrical markets, including low-voltage insulated power and control cables, building wire, instrumentation cable, halogen-free power and control cables, and overhead power cables.
The company was established in 1996 under the name of BICC Egypt as a joint venture between BICC UK and Egyptian investors. In September 2010, General Cable acquired BICC Egypt. At that time its annual sales were $30 million. The decrease in sales is attributed to the sharp decline in the value of the Egyptian pound which went from EGP3 to the dollar to currently EGP 8-11 (official and street values).
EIP was founded in 2014 by the Obegi group and Generation Alfa together with Wassim Heneine and Karim Burhani. It mainly invests in small and medium enterprises with growth prospects in the Middle East and North Africa.
Reported by Shikrallah Nakhoul
Date Posted: Jun 24, 2016