Abu Dhabi-based food group Agthia is buying a a majority stake in Egypt's Ismailia Investments, which makes frozen chicken and beef products.
Agthia said its board approved the acquisition of a 75.02 per cent stake in the company, also known as Atyab, in a deal that values it at about 3.22 billion Egyptian pounds ($205 million), according to a filing on the Abu Dhabi Securities Exchange, where its shares trade.
“This acquisition is a continuation of our strategy to position Agthia as the leading FMCG [fast moving consumer goods]player in the Middle East and North Africa region," Agthia's chairman Khalifa Al Suwaidi said. "Egypt is a key growth market for Agthia and Atyab operates in a sector that is fast-growing and attractive. This transaction will create new opportunities ... and deliver enhanced value for our shareholders.”
Atyab is one of four brands owned by Ismailia, alongside Meatland, Shiketita and Furat, which all cater to different segments of the market. The company has a capacity to process 70,000 tons of meat per year through its various facilities and has achieved a 28 per cent compound annual growth rate between 2016 and 2020. Revenue for 2020 stood at Dh424m and earnings before interest, tax, depreciation and amortisation at Dh79m ($21.5m).
Agthia, which is owned by Abu Dhabi's state holding company ADQ, grew revenue by 1.1 per cent last year to Dh2.06bn.
The company has made a number of acquisitions in recent months as it vies to become a leading regional player in the industry. Deals have included the purchase of Kuwait's Al Faysal Bakery and Sweets, Jordan's Nabil Foods and the world's largest date processing and packaging company, Al Foah.
"The proposed acquisition of Atyab is expected to drive significant cost and revenue synergies, enabling expansion in value-added retail products and cross-market distribution," EFG-Hermes, which is advising Agthia on the deal, said on Wednesday.
The purchase of Atyab "presents a significant opportunity for Agthia to expand in the processed protein sector following our recent announcement of board approval to acquire Nabil Foods", Agthia's chief executive Alan Smith said.
“The transaction would place Agthia at the forefront of a growing sector in one of the Mena region’s fastest-growing economies, providing access to around 100 million new consumers characterised by a wide youth segment and rising income."
The company is buying shares from a from a number of executives, but founder Attito Raslan is retaining a stake in Atyab and will "build on his successful track record of growing the business with the backing of Agthia's financial strength", it said.