Investcorp buys into Kuwaiti auto group
Kuwait, September 30, 2012
Bahrain-based investment company Investcorp said it has signed an agreement with Automak Automotive Company (Automak), a leading independent vehicle leasing and rental company in Kuwait, to acquire a 35 per cent stake in the company.
A global provider and manager of alternative investment products, Investcorp said the key stake was acquired through its $1 billion Gulf Opportunity Fund, which invests in companies in the GCC and Turkey as well as the wider Mena region.
The Automak deal comes two months after the Fund had acquired a 30 per cent stake in Orka Group, one of Turkey’s leading and fastest growing menswear retailers.
Mohammed Al Shroogi, Investcorp’s president for Gulf Business, said, "Automak is our sixth investment in the region and our second in a strong and established Kuwaiti company. We are proud to be entering into this partnership with Automak and its shareholders."
"We believe Automak is a market leader in an attractive sector with a robust business model and is well positioned to grow locally and regionally. We look forward to working closely with Automak to continue growing and enhancing its performance," he stated.
Founded in 2002 by Al Kharafi Projects Company and Ghazi Omar, its vice chairman, Automak is one of the few major players in the vehicles rental and fleet leasing business with over 15 per cent market share in Kuwait.
Automak operates a fleet of over 4,500 vehicles and provides a wide spectrum of services tand products including vehicle leasing, rental, quick service and distribution of spare parts, tyres and lube oil.
Its premier clients include national oil companies, public ministries and multinational corporations.
Commenting on the deal, Omar said: "In just 10 years, Automak has been able to establish itself as one of the largest players in the Kuwaiti vehicle leasing sector. There are attractive growth opportunities for us and this is why we looked for a partner with experience, capital and know-how."
"We believe that Investcorp will be instrumental in the success of our next phase of growth," he added.
The vehicle rental and leasing sector is a growing industry in the GCC region as companies seek to de-lever their balance sheets and favor renting fleets of vehicles versus ownership, said the official.
In Kuwait, the sector is expected to sustain its strong growth, supported by favorable demographics, further expansion of the oil sector and increased government expenditure.
Omar said Investcorp was a pioneer of private equity in the region and is respected globally for its expertise in this space.
"Our solid track record and enhanced equity base combined with Investcorp’s strategic support will help accelerate Automak’s growth in Kuwait and abroad. We see tremendous potential in corporate, oil and individual leasing sectors in Kuwait and other markets in the region,” he added.
Since inception, Investcorp has invested in 103 companies in North America, Europe and Mena region representing $33 billion in value. These investments include top luxury brands such as Gucci, Tiffany & Co., Saks Fifth Avenue, Chaumet, Breguet, Ebel and Carter’s.-TradeArabia News Service