Arabtec raises stake in Target to 98pc
Abu Dhabi, November 26, 2013
Arabtec Holding, a leading construction group, has entered into a definitive agreement to increase its stake in Target Engineering, a top EPC contractor to 98 per cent, with senior management retaining the remaining two per cent stake.
Arabtec acquired 60 per cent of Target Engineering in 2007, and the acquisition of a further 38 per cent for Dh270 million ($73.5 million) supports Arabtec’s strategic expansion in EPC in the oil & gas and power sectors. The transaction will be funded by the proceeds from Arabtec Holding’s recent rights issue.
As a standalone business, Target Engineering has performed well in recent years, generating revenue of Dh1.4 billion in 2012.
Following the acquisition, Arabtec intends to use Target Engineering as its preferred contractor delivering medium-sized contracts and focus on investing in the Company for its future growth.
Hasan Abdullah Ismaik, managing director and CEO of Arabtec Holding said: “Target Engineering has been an important part of Arabtec’s business, since our initial acquisition in 2007.”
“Given Target Engineering’s expertise and Arabtec’s strategic expansion within oil & gas EPC, this is the next logical step for us.
“This acquisition, together with the joint venture with Samsung Engineering, will allow us to further grow our EPC offering and strengthen our capabilities in the oil & gas, power and related infrastructure sectors in Mena,” he added.
Shohidul Ahad-Choudhury, head of Mergers and Acquisitions at Arabtec Holding stated: “We look forward to growing Target Engineering’s existing offering and capabilities while expanding the company’s geographical reach to the rest of the Mena region.
“Target will remain focused on medium-sized contracts, which will complement the new JV, ensuring that Arabtec is uniquely-placed as a full service EPC player, addressing the medium to large-scale projects market.”
The transaction is subject to the satisfaction of customary closing conditions and is expected to complete by the end of the year.
Established in 1975, Target Engineering Construction is one of the leading single source engineering, procurement and construction (EPC) contractors, focused on the oil & gas, power and marine sectors. – TradeArabia News Service