UAE's Agthia expects to have about $270mln for M&A in 2022, CEO says

Agthia has made five acquisitions since the fourth quarter of last year, the latest being healthy snacks maker BMB Group, which has yet to be finalised.

  
An investor uses his mobile phone at the Dubai Financial Market.

An investor uses his mobile phone at the Dubai Financial Market.

REUTERS/Mosab Omar

DUBAI - United Arab Emirates fast-moving consumer goods firm Agthia will likely have 1 billion dirhams ($272 million) of "firepower" for acquisitions next year, as it seeks to become an industry leader in the region by 2025, its chief executive said on Wednesday.

Agthia has made five acquisitions since the fourth quarter of last year, the latest being healthy snacks maker BMB Group, which has yet to be finalised. 

"When we look at our comfort, shall we say, around ratios, then 1 billion (dirhams) is what we feel that we have available for 2022," CEO Alan Smith told Reuters in an interview.

"In the background we have a pipeline of ideas and discussions that are ongoing, but I can't say whether there's anything concrete right now" because the company is listed, he said.

Agthia is looking at acquisition targets in the wider Middle East region, Smith said, adding markets of interest included Pakistan, as well as Egypt and Saudi Arabia where Agthia has already bought stakes in businesses. 

Pakistan and Egypt, with populations of around 220 million and 100 million respectively, are being considered for their size, expertise within Agthia's management team, and relative stability in their currencies over the past few years, Smith said.

The BMB acquisition is expected to be finalised this quarter, the CEO said.

"It's quite dynamic in terms of what the position is, it depends on the performance of the new businesses, how much cash we generate," Smith added on acquisition spending.

Agthia is currently comfortable with its financial position but would consider different financing options, including a bond sale, if needed in future, he said.

Smith said demand in the first quarter was somewhat "constrained" but Agthia was pleased with performance in the second and third quarters, even in its base business excluding acquisitions.

"We expect our growth next year to be more skewed to the new businesses, so snacking and protein is going to be driving the growth moving forward," Smith said.

"I think our view for Q4 and 2022 is positive," he added, barring any adverse developments related to the pandemic.

($1 = 3.6728 UAE dirham)

(Reporting by Yousef Saba Editing by Mark Potter) ((Yousef.Saba@thomsonreuters.com; +971562166204; https://twitter.com/YousefSaba))


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