Ahead of listing, Mezzan Holding looks for acquisitions

Mezzan Holding, which is slated to list on Thursday on the Kuwait Stock Exchange, is studying a water manufacturing and distribution company for acquisition.

  

Sunday, Jun 07, 2015

Dubai: Mezzan Holding, which is slated to list on Thursday on the Kuwait Stock Exchange, is studying a water manufacturing and distribution company for acquisition, would not want to buy anything more than 20 million Kuwaiti Dinars (Dh243 million), its chief executive told Gulf News.

The company is looking to acquire 1 acquisition per year, and plan 2-3 smaller acquisitions for the next 2-3 years, Garry Walsh, chief executive officer at Mezzan Holding Co. said.

“We would like to acquire more in UAE, Saudi, Oman, which are key point of interest at this point. we are looking for companies with very good distribution network from which we can push our products,” Walsh said.

The company is investing in a warehouse in Dubai, along with Riyadh in Saudi for expanding the distribution.

The company generates 30 million Kuwaiti dinars in cash per year, out of which 10 million Kuwaiti Dinars per year is available for the company to make acquisitions, he said.

The company recorded sales of 182 million Kuwaiti Dinars in 2014, up from 142 million Kuwaiti Dinars a year ago. Of that growth half was organic and the other half was through acquisitions. Profits were at 16.1 million Kuwaiti Dinars last year.

“We expect high double digit of top line growth and slightly better bottom line growth,” Walsh said. In the first quarter, the turnover was up just over 10 per cent, while bottom line was up 24 per cent.

The company has about 25,000 Stock Keeping Units (SKU) currently, and all of the brands are “enjoying good growth.”

Hard work:

The company will be the first non-governmental firm to list on the KSE after 2009. Under Kuwaiti law, the company is required to offload 30 per cent stake among 200 various investors to ensure liquidity after they get listed.

“We have completed that first stage of getting 200 investors and we will go live on June 11,” Walsh said, adding “It’s been three years if hard work that has gone into it, everything from changing governance structure to changing management team etc and everything for us to cope with an IPO.”

About 63 per cent of the shares would continue to owned by Al Wazzan family after the listing.

About 9 per cent would be held by the Saudi nationals, while 9 per cent of the shares would be owned by UAE, Qatar firms and the other 12 per cent would be held by Kuwaiti retail investors, which would be a total of more than 290 investors.

The total proceeds of 65 million Kuwaiti Dinars, and would go to founding share holders.

By Siddesh Suresh Mayenkar Staff Reporter

Gulf News 2015. All rights reserved.