KUWAIT: Hilal Cement Company announced the sale of its controlling equity interest in Atlas Commercial Company for KD6 million, valuing 100 per cent of the equity of Atlas Commercial Company at a price to earnings ratio of approximately 11.5 times earnings in 2006.
The sale of Atlas Commercial Company by Hilal Cement Company is part of the company's recent strategic redirection to transform Hilal Cement Company into a focused leading cement company in Kuwait and the wider Middle East. Yacoub Al-Sharhan, Chairman of Hilal Cement Company, said, "we are currently looking at a number of potential opportunities to enhance our market position in cement in Kuwait and across the region. We believe that refocusing our operations on cement will allow us to implement ambitious plans we have set for the company."
Hilal Cement Company retained GulfMerger to advise on the sale of Atlas Commercial Company and ensure fair value to shareholders of the company. Yacoub Al Sharhan said "we are pleased with the terms of the sale. This is a company which Hilal Cement Company acquired in 2000 for KD930,000. As a result of this sale, our company and shareholders have realized a significant capital gains of approximately KD4 million".
Yann Pavie, Chief Executive Officer of GulfMerger, said "the valuation of Atlas Commercial Company reflects the currently strong market conditions for building materials in Kuwait and the continued positive outlook for the business which posted earnings in 2006 of approximately KD0.8 million. We believe that significant opportunities exist to create value through consolidation of the wood and steel building materials sector."
Established in 1984, Hilal Cement Company is a leading company engaged in the import and distribution of cement in Kuwait. For the year ended December 31, 2006, Hilal Cement Company posted revenues of KD25 million and earnings of approximately KD3.5 million. Hilal Cement Company is listed on the Kuwait Stock Exchange.
Established in 1963, Atlas Commercial Company is a leading company engaged in the import and distribution of building materials in Kuwait including wood and steel products. For the year ending December 31, 2006, Atlas reported revenues of KD7.2 million and net earnings of KD0.8 million.
Established in 2007, GulfMerger is an independent financial advisory firm, principally focused on middle-market mergers, acquisitions, and strategic partnerships in the Middle East.
© Kuwait Times 2007
