Bloomberg News

Gulf Capital of Abu Dhabi Buys 82.7% Stake in Sakr Energy

January 22, 2012

(Updates with CEO’s comment in second paragraph.)

Jan. 22 (Bloomberg) -- Gulf Capital, an Abu Dhabi-based private-equity company, bought an 82.7 percent stake in power generation services company Sakr Energy Solutions FZCO and said it expects to complete three more buyouts this year.

Gulf Capital acquired the stake without using debt and at 40 percent below the average valuation of global peers, Chief Executive Officer Karim El Solh said in a telephone interview today. The stake was acquired from Sakr Holding, which along with Dubai-based Sakr Energy’s current management, set up the company in July 2007 after the separation of the Middle Eastern assets of GE Energy Rentals, Gulf Capital said in a statement.

“This is a young and growing company in a fast-growing sector” and the deal adheres to Gulf Capital’s strategy of investing in defensive and non-cyclical businesses, El Solh said. He declined to provide a value for the acquisition.

Gulf Capital, set up in 2006, is using funds from its $533 million GC Equity Fund II for investments. More than half of the funds have been used so far and the company expects to have spent three quarters by year-end as it plans another two to three buyout deals, El Solh said. It also expects to sell one to two investments this year, he said.

Sakr Energy, which operates in the United Arab Emirates, Saudi Arabia, Qatar, Yemen, Oman and Tanzania, plans to raise $30 million to $50 million from loans to expand, El Solh said. The company provides deployment of turnkey power generation solutions along with rental equipment, and plans to expand in other countries in Africa and Southeast Asia, he said.

The global deficit in power generation increased to 150,000 megawatts in 2010 from 50,000 megawatts in 2004 and is expected to rise to 600,000 megawatts by 2015, according to the Gulf Capital statement.

--Editors: Shanthy Nambiar, Susan Lerner

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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