The Spinneys deal could see TPG Capital buy the retailer’s Egyptian stores from current owner UAE-based Abraaj Capital, with anonymous insiders telling Bloomberg the deal may be worth around US$100m if it goes ahead.
TPG eyes regional F&B
TPG Capital and Abraaj previously co-operated on the purchase of Saudi food chain Kudu in 2014, marking the US firm’s first foray into the Middle East. TPG Capital has also been named as a bidder for the ill-fated Americana takeover.
Spinneys is one of the most prominent grocery retail chains across the Middle East, with operations in Jordan, Lebanon and Qatar, and a franchise in the UAE where it also operates Waitrose stores under licence from John Lewis. The deal under discussion would only be for the retailer’s Egyptian operations.
Earlier in May, Gulf Capital announced a deal to buy Multibrands, one of the largest food and beverage distributors in the GCC, with the investment firm agreeing to buy Multibrands outright. The firms did not disclose the size of the deal, but Gulf Capital said the distributor had an annual turnover of more than US$100m.
Eyes on the KSA prize
While Multibrands, founded in 2006 by Kuwaiti entrepreneur Fozan Al-Fozan, has operations across the GCC, Gulf Capital said it was mostly interested in the firm’s access to Saudi Arabia’s fast-growing F&B market. The investment firm said it expected the sector to grow from US$56bn this year to around US$83bn by 2020.
“The F&B market in the kingdom remains under-penetrated, with significant room for growth in the grocery retail outlets and food service retail outlets as well as in the hotels, restaurants and café segments. This growth trend is accentuated due to a growing population, rapidly growing tourist arrivals, rising affluence and shifting consumer preference towards convenience variety,” said Richard Dallas, senior managing director of Gulf Capital’s private equity group.
Gulf Capital CEO Karim El Solh was upbeat about the deal: “Having raised US$1bn in dry powder over the last two years across our private equity and private debt funds, we enter 2016 extremely well capitalised and are continuously looking for opportunistic acquisitions of market leaders in defensive sectors. Multibrands represents such an acquisition and gives us a unique exposure to the fast growing Saudi food and beverage market, the largest in the Gulf.”