DSI expects Libya licence soon as it plans two buyouts in 2009 |
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Drake and Scull International (DSI)Drake and Scull International (DSI)
expects to get its licence for Libya next week, said its CEO yesterday.The firm is looking at its next two acquisitions by the end of the year in Kuwait and Qatar, while the other two will be pushed to 2010, said Khaldoun Tabari, Chief Executive of DSIDSI
. He talked to Emirates Business on the sidelines of signing the acquisition papers with Passavant-Roediger (PR), a global developer of wastewater, water and sludge treatment technologies. The enterprise value of this acquisition is Dh 145 million and it is the first acquisition since listing with the Dubai Financial Market (DFM) in March.
PR has more than 5,000 installations and a presence in 13 countries across Europe, Middle East, North Africa and Asia. Under the acquisition pact, DSIDSI
will own 82 per cent of Passavant-Roediger. The remaining 18 per cent will be with Bilfinger Berger, a publicly-listed German firm active in construction services."We will be financing 50 per cent and the rest will be from local banks. We have aligned Dh500 million for acquisitions and have Dh1 billion in cash reserves. We are using Dh250m for the acquisitions and the rest will be from the banks.
"The rates for the loans vary from one to 1.5 per cent above bank to bank rates," said Tabari.
"We are now close to the next two of our intended acquisitions in Kuwait and Qatar. We might do one for certain or two by the end of 2009. The other two are in Saudi and are last on the list.
Saudi is closer now than when we announced it in March. We expect the third one by Q1 of 2010 and the last one by Q2 of 2010. It all depends if the board feels encouraged by the numbers," said Tabari.
"In a month, DSIDSI
will be operating in Saudi Arabia and is looking at organic growth. We are bidding projects in construction and hence also acquiring a base since we need the workforce with our future acquisition. We have also started an office in Jordan, Bahrain and Thailand. In the coming week, we will get our licence for Libya."According to Reuters, Tabari said that the next acquisition by this year-end could be worth up to Dh75m and that the firm would be a mechanical, engineering and plumbing company.
Bloomberg added yesterday that the next three acquisitions will add Dh450m to the existing backlog of orders worth Dh3bn.
Menawhile, the engineering projects taken by Passavant-Roediger will also generate revenues for DSIDSI
's other business streams including MEP and Civil Contracting, as wastewater and water treatment plants require engineering, procurement and construction disciplines, which can be accumulatively provided by DSIDSI. Tabari said there is a clear need for water, wastewater and sludge treatment solutions in the Gulf as the population grows rapidly and the shortage of water increases.
Passavant-Roediger operates in countries such as Germany, the UAE Algeria, Turkey and China among others. The firm's current backlog stands at more than Dh450m with total order book adding up to Dh1bn.
"This is an acquisition that realises the firm's plans for both vertical and horizontal expansions," said Tabari. Around $25bn per annum is currently being spent on wastewater treatment worldwide.
By Sona Nambiar
© Emirates Business 24/7 2009
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