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Gulf Capital Close to Deal for Reach Group

Abu Dhabi-based private equity firm Gulf Capital is close to sealing a deal to buy 80% of consultancy firm Reach Group, Reuters reported Thursday. Gulf Capital will be closing the transaction during the first quarter this year through its $533 million Private Equity Fund II, Reuters wrote. The value of the deal is estimated at around 100 million dirhams ($27 million).

(Reuters) – Abu Dhabi-based private equity firm Gulf Capital is in the final stage of acquiring close to 80 percent of regional consultancy firm Reach Group, two sources close to the transaction told Reuters.

Gulf Capital will be closing the transaction during the first quarter this year through its $533 million Private Equity Fund II, one of the sources said.

The deal may be valued at around 100 million dirhams ($27 million), according to the source. The sources did not want to be identified as the matter has not been made public yet.

Abu Dhabi-based Reach Group, founded in 1999, offers management consulting, information technology, recruitment and outsourcing services. It has offices in the UAE, Kuwait and Jordan, according to the company website.

Neither Gulf Capital Chief Executive Karim El Solh nor executives at Reach Group were available for comment.

El Solh had told Reuters in an interview in November the company was in the final stages of acquiring majority stakes in four regional firms.

The company last month acquired an 82.7-percent stake in power generation provider Sakr Energy Solutions FZCO. It did not provide the value of the deal.

A potential deal would be Gulf Capital’s second this year despite a sharp drop in private equity investments in the Gulf. Investors backing out of capital calls, sellers demanding higher prices than buyers were willing to pay and increasing competition from family groups hampered the growth of the industry.

Gulf Capital, which currently has around $1 billion of assets under management, is planning to exit two investments in 2012, including its stake in Gulf Marine Services (GMS) — a regional jack-up and support barge company — Solh said in September.

In July, Gulf Capital and another regional PE firm Amwal AlKhaleej sold their stakes in Maritime Industrial Services in a $336 million deal to Lamprell Plc in one of the rare private equity exits from the region. ($1 = 3.6730 UAE dirhams) (Reporting By Mirna Sleiman; Editing by Jon Loades-Carter)