Clyde & Co advises M'Sharie on strategic GCC private placement

Dubai Investments divested 40% of its shareholding in M'Sharie, its private equity arm, via a private placement targeted towards selected strategic investors across the GCC. The private placement was oversubscribed by more than 100%.

Valued at Dhs1bn, M'Sharie is the leading corporate private equity firm in the UAE and holds ownership interest in 16 companies operating in diversified businesses, of which 14 are majority or fully owned subsidiaries and 2 are joint venture affiliates. The divestment of M'Sharie will allow Dubai Investments to raise capital of Dhs400m.

The Clyde & Co team advising M'Sharie was led by partner Niall O'Toole and Senior Associate Yves Delaey of the firm's Abu Dhabi office. Gulf International Bank were the placement agents for the deal.

Speaking on the divestment, Khalid Kalban, MD & CEO of Dubai Investments, said:

"The private placement of M'Sharie is a strategic move aimed at establishing a strong presence for the company within the GCC market and ensuring its continual growth by offering shareholding to a select group of investors from UAE & GCC."

"By divesting a minority stake, we put ourselves in a better position to enhance M'Sharie's performance through the introduction of commercial relationships from new shareholders, and form strategic alliances that could significantly boost the expansion of M'Sharie's acquisition activities to other GCC countries," Kalban added.

Niall O'Toole commented, "This is obviously a big step for M'Sharie. The new investors it has attracted will no doubt help it to achieve its objectives through the GCC. The fact that the private placement was so over subscribed is a vote of confidence in the existing management team and in the corporate governance procedures adopted by M'Sharie. We look forward to helping M'Sharie through the next stage of its journey."

Regional investors who have acquired an equity stake in M'Sharie as part of the private placement include National Bonds Corporation (UAE), Gulf International Bank (Bahrain), Al Mal Capital (UAE), The First Investor (UAE), Al Arif Investment (UAE), Abdulaziz Alajlan Sons (KSA) and Ali Bin Hassan Dayekh (Dammam).

Commenting further, Clyde & Co's Yves Delaey said: "All the formalities are now being completed to reconstitute the board of directors of M'Sharie to accommodate the new investors. We expect this to go just as smoothly as the private placement."

M'Sharie has a proven track record of growth and profitability. Between 2004 and 2007, the company achieved a Compounded Annual Growth Rate (CAGR) of 28% in total revenue and 62% in net income of portfolio companies.