SAUDI ARABIA. Investment funds advised by Levant Capital Limited (“Levant Capital”) and Citi Venture Capital International (“CVCI”) announced today that they have jointly acquired a controlling stake in Al-Raya For Foodstuff Company Limited (“Al-Raya”), a leading supermarket chain in Saudi Arabia.
The transaction, valued at US$100 million, presents an opportunity for Levant Capital and CVCI to capitalize on the growth in consumer-driven demand and the increasingly attractive middle income segment of the Gulf region’s largest economy. The transaction closed on February 21, 2012.
Based in Jeddah, Al-Raya operates a fast-growing chain of 25 supermarkets across 14 cities of the western and southern regions of Saudi Arabia. The company achieved sales of approximately SAR 800 million in 2011, an increase of 17% since 2010. Founded more than 20 years ago by the current management, the company has a leading position and strong brand loyalty; serving more than 50,000 customers daily across the cities it operates in, which include Jeddah, Najran, Jizan, Madina, Sabya and Taif.
Sunil Nair, CVCI Managing Partner and region head for EMEA commented: “We are very excited about the macro-economic fundamentals of the Kingdom of Saudi Arabia, the largest and most attractive economy in the Middle East region, as well as the sector and company’s growth prospects. This buyout is part of CVCI’s strategy of investing in consumer focused businesses in emerging markets and backing strong management teams”.
Commenting on the transaction, Salameh Sweis, Chief Executive Officer of Levant Capital said: "We are pleased to have acquired a controlling stake in Al-Raya. The food retail sector in Saudi Arabia has been experiencing significant growth, driven by increases in population and disposable income and the supermarket segment within the food retail sector is expected to grow faster than the overall market as consumers continue to migrate towards organised retail, which Al-Raya is well positioned to capitalise upon.”
Mr Majed Al-Khammash, founder and CEO of Al-Raya, said: "We are delighted to partner with Levant Capital and CVCI for the next chapter in Al-Raya’s history. We have an ambitious growth plan that involves rolling out new stores. We want to more than double in size over the next few years and we look forward to leveraging the experience and know-how of our new shareholders to support us in achieving this plan. Our expansion will continue to focus on our core markets where we want to remain the grocery shopping destination of choice for Saudi families.”
About Levant Capital
Levant Capital Limited is an independent investment firm focused on making private equity investments in middle market companies with growth opportunities in the Middle East, Turkey, and North Africa. Established in 2006, the firm is based in Dubai and manages several investment vehicles that count international institutions and leading GCC family offices as investors. Levant Capital is chaired by HRH Prince Khaled bin Alwaleed bin Talal Alsaud.
Levant Capital is regulated by the Dubai Financial Services Authority.
About CVCI Private Equity
CVCI is a leader in global emerging markets private equity investing, and currently manages over $7 billion in equity investments and committed capital. CVCI has an internationally integrated investment team with over 50 professionals worldwide with a local presence in Singapore, London, Hong Kong, New York, Mumbai, New Delhi and Santiago.
Since 2001, private equity funds advised by CVCI have been active investors in the Middle East including several deals in the pharmaceutical sector as well as the telecom sector. Exited investments include Hikma (a leading Jordanian pharmaceutical manufacturer) and Oger Telecom (a leading Saudi telecom conglomerate).
CVCI has successfully invested in food retailers in the EMEA region, including Dixy Retail (the leading Russian hard discounter) and IKI (a supermarket chain in the Baltic States). CVCI is part of Citi Capital Advisors, an alternative asset management platform that offers a broad range of innovative strategies and products to select institutional and ultra-high-net-worth investors.
For more information, please visit www.cvci.citi.com