Gulf Capital Acquires 100% of Multibrands to Capitalise on the Growth in Consumption in Saudi Arabia

Gulf Capital, one of the largest and most active alternative investment firms in the Middle East, announced today that it has acquired 100% of Multibrands Trading Co, one of largest food and beverage (F&B) distributors in the Kingdom of Saudi Arabia, with an annual turnover in excess of US$100 million. Founded in 2006, Multibrands operates in the food and beverage sector which is one of the largest and fastest growing non-oil sectors in the Kingdom with a current market size of US$56 billion (SAR 210 billion). The Food and Beverage market is expected to reach US$83 billion (SAR 311 billion) by 2020, representing a Compounded Annual Growth Rate (CAGR) of 6.5 percent. Multibrands was established by Kuwaiti entrepreneur Mr. Fozan Al-Fozan, who has been operating in the F&B sector since 1982 and has a number of businesses across the GCC.

Dr Karim El Solh, Chief Executive Officer of Gulf Capital which is celebrating its 10th Anniversary this year, said: “This latest transaction, the largest of its kind in its sector, continues Gulf Capital’s strategy of investing in defensive and fast growing sectors across the Gulf. Gulf Capital has built to date a portfolio of defensive investments in resilient and fast growing sectors such as food and beverage, healthcare, education, power, water and FMCG. Having raised $1billion in dry powder over the last two years across our private equity and private debt funds, we enter 2016 extremely well capitalised and are continuously looking for opportunistic acquisitions of market leaders in defensive sectors. Multibrands represents such an acquisition and gives us a unique exposure to the fast growing Saudi food and beverage market, the largest in the Gulf.”

Richard Dallas, Senior Managing Director Private Equity Group at Gulf Capital, said: “The F&B market in the Kingdom remains under-penetrated, with significant room for growth in the grocery retail outlets and food service retail outlets as well as in the hotels, restaurants and cafés segments. This growth trend is accentuated due to a growing population, rapidly growing tourist arrivals, rising affluence and shifting consumer preference towards convenience variety. As a market leader in the F&B sector, Multibrands gives us a unique exposure to this growth potential and allows us to capitalize on the rising consumption trends in Saudi Arabia. Gulf Capital and its investors are very positive about this transaction.”

With over 50 brands across five main product categories, Multibrands enjoys a diverse portfolio of products that are distributed through a range of modern and conventional retail chains, hotels, cafes, bakeries and restaurants.

Abdullah Shahin, Managing Director Private Equity Group at Gulf Capital, said: “The food sector in Saudi Arabia is an appealing sector to be invested in with strong growth prospects. Multibrands is an attractive business with solid fundamentals and ambitious expansion plans. Working with its talented management team, Gulf Capital will benefit from the favourable market conditions to grow the business through geographic diversification, product expansion and further developing the addressable market. With Multibrands, we found the perfect platform to capitalise on the high growth of the Saudi food service distribution markets”.

KPMG acted as financial and tax advisor, while King and Spalding and Freshfields Bruckhaus Deringer LLP acted as M&A and Financing legal advisors to Gulf Capital on the transaction. The sellers were advised by NBK Capital and Hogan Lovells. ADCB provided debt refinancing and Wasatah Capital acted as arranger.