Investcorp, the asset management firm specializing in alternative investments, said it will invest $98 million in Dubai-based Redington Gulf, the leading distributor and service provider of IT and telecom products in the Middle East and Africa.

Investcorp will make the investment through its $1.1 billion Gulf Opportunity Fund I. With this deal, Investcorp has become a significant minority shareholder of the company, the company said.

The capital increase will be used to support Redington Gulf’s successful growth in the region. It will not only fund their organic growth, but also enable Redington Gulf to fund add-on acquisitions to expand their footprint and strong presence in countries throughout the Middle East and Africa, the companies said in a statement.

Investcorp will help Redington Gulf to develop and implement the next stage of its corporate strategy following a period of dramatic organic growth, by assisting with add-on acquisitions, banking/financial relationships and balance sheet optimisation.

The services provided by Redington Gulf include management of inventory, warehousing, logistics, transportation and credit management to local and regional resellers/retailers, managing the information flow and providing warranty and post warranty repair. 

Investcorp managing director and co-head of its Gulf growth capital business, Azmat Taufique, said, 'This first investment by our Gulf Opportunity Fund I perfectly showcases one of our key strategic thrusts for the Mena region: working with leading mid-sized international players to set up and/or expand joint ventures in the region.'

'Redington Gulf has excellent prospects due to strong underlying demand in Middle East and Africa, driven in part by the massive investment programs of Gulf governments in health, education, and infrastructure, as well as the surging African telecom market. We look forward to working together with Redington India to help Redington Gulf manage its rapid growth and maximize its potential,' he noted.

R. Srinivasan, managing director of Redington India said: “Redington Gulf has been a tremendous successful story for us by building itself, within a few years, into the leading distributor of IT and telecom products in the Middle East. Investcorp is now the perfect strategic partner to help Redington Gulf exploit further the exceptional opportunities in the Middle East and Africa.  We look forward to working together in close partnership.”

Investcorp managing director and co-head of its Gulf growth capital business Christophe de Mahieu, said: “We are truly delighted to become the partner of choice of Redington for the Gulf. This is a win-win partnership for growth and performance. Our respective operational and financial skills are highly complementary and we are fully aligned on what we aspire for Redington Gulf to achieve in the next 3-5 years.”

Raj Shankar, CEO of Redington Gulf, said Investcorp’s expertise and brand name in the region would be of very significant help to the company over the next few years as it seeks to sustain the rapid growth in revenues.

'Investcorp’s operational expertise in a wide range of relevant industries and situations will help us continue to drive improvements in our company, and its financial relationships and experience will be of great value in broadening our financing options and managing our financial stakeholders.'

Redington Gulf, wholly owned subsidiary of Redington India (REDIL), is the unrivalled leading IT distributor and supply chain solutions provider in the Middle East and Africa, distributing over 24 brands of IT and telecom products for global vendors such as HP, Acer, Samsung, Western Digital, Nokia, Cisco and Avaya. 

The company currently operates on a standalone basis in the Middle East and key African countries with total revenues exceeding $1 billi