The Abraaj Group has sold its 49 per cent stake in Network International to Warburg Pincus and General Atlantic, after abandoning IPO plans for the Dubai-based payments operator.
Dubai-based Abraaj, the region’s largest private equity group, did not disclose financial terms of the deal.
Abraaj had been working with banks including Bank of America, Goldman Sachs and JP Morgan Chase for a potential initial public offering of the company, but these plans were abandoned in favour of a direct stake sale, according to Mustafa Abdel-Wadood, partner and global head of Abraaj’s regional funds business.
“We were considering an IPO as one of the strategic options, however early in the process we received a valuation that made a lot of sense from a strong group of buyers, and therefore went down that route instead,” Mr Abdel-Wadood told The National.
Mr Abdel-Wadood said that the decision to not go down the listing route was not due to adverse market conditions, noting that other companies in the same sector had successfully listed in such a climate.
Network International was set up in 1994 by Emirates Bank – 13 years before its merger with NBD – for the provision of payment processing facilities for the bank. Abraaj acquired a 49 per cent shareholding in the company in 2010 for about Dh2 billion.
Emirates NBD will retain its 51 per cent stake in the company following Abraaj’s exit.
“As the payments sector continues to benefit from long-term structural growth, we are delighted to partner with CEO Bhairav Trivedi, his talented management team and Emirates NBD, to help Network International extend its leadership position across the Middle East and Africa,” said Joseph Schull, managing director and head of Europe, Middle East and Africa at Warburg Pincus.
“Network International benefits from a leading market position in an exciting market and region, an excellent management team, and best-in-class products and services.”
The payments company serves more than 70 banks and financial institutions across 17 countries in the Middle East and Africa, last year handling Dh83bn worth of transactions in about 50 currencies for approximately 18,000 merchants in the UAE.
The company also manages one of the region’s most extensive ATM networks.
The sale of the Network International is Abraaj’s second announced divestment of the week.
Abraaj and the International Finance Corp (IFC), a unit of the World Bank, sold their stakes in African insurer, Saham Finances to its Moroccan parent company Saham Group, and to South Africa’s financial services firm Sanlam Group. Abraaj did not reveal the value of the transaction but Sanlam said it bought a 30 per cent stake in Saham Finance for $375 million from Abraaj and the IFC.
Abraaj is focusing on the consumer space, with proclivity to invest in health care, financial services and fast-moving consumer goods in these markets.
Abraaj owns stakes in other high-profile firms including the Sharjah-based low-cost carrier Air Arabia and supermarket chain Spinneys.
with additional reporting by Dania Saadi