Private equity firm Gulf Capital plans to sell some of its investments towards the end of 2017 and early 2018 as market sentiment and the regional economy improve, its chief executive told Reuters. Karim El Solh declined to say which stakes the Abu Dhabi-based company, one of the biggest private equity firms in the region, was considering offloading but said that they would be appealing to global strategic buyers. Sources familiar with the situation said Gulf Capital's stake in Egyptian medical firm TechnoScan and its remaining stake in utility business Metito Holdings were both for sale.
"Regionally, over the next two years, as the market comes back and economies recover, we will consider some regional exits," El Solh said in an interview. "I can see the exits coming more towards the end of 2017 and early 2018 as the regional markets recover and investor sentiment comes back," he said.
Economies in the Gulf have been hurt by the slide in oil prices since the middle of 2014, which has hit spending by governments dependent on energy revenues and sapped consumer confidence. Economists think regional growth could rebound slightly in 2017, on the assumption oil prices pick up.
Despite the slowdown in growth, merger and acquisition activity in the Gulf has been relatively brisk in 2016 as the low oil prices have pushed family-owned businesses to spin-off assets and state-linked companies to consolidate.
Notable deals include Gulf-based Adeptio's acquisition of a 67 percent stake in Kuwait Food Co (Americana) from a wealthy Kuwaiti family for about $2.35 billion, and the merger of Abu Dhabi's two largest banks, National Bank of Abu Dhabi and First Gulf Bank, in a deal due to be completed early next year. Gulf Capital said this month it had acquired a controlling stake in Sporter.com, an online retailer of sports and nutrition supplements in the Gulf region, while it bought Saudi Arabian food and drinks distributor Multibrands in May.
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