Investcorp has agreed to acquire a 20% stake in Gulf Cryo, a Kuwait-based manufacturer of industrial, medical and specialty gases. No financial terms were disclosed. Gulf Cryo was founded by, and is still owned by, the Al Huneidi family. It has annual sales of approximately $1.5 billion.
Investcorp, the asset management firm specialising in alternative investments, announced today that its Gulf Opportunity Fund is to acquire a 20% stake in Gulf Cryo, the Al Huneidi family-owned company that is the leading manufacturer of industrial, medical and specialty gases in the Middle East.
Gulf Cryo was founded in Kuwait in 1953 by the Al Huneidi family and has expanded over two generations to become one of the most successful family businesses in the Gulf. Under the leadership of its current Chairman and CEO, Mr. Amer Salim Al Huneidi, Gulf Cryo has expanded its presence from Kuwait into the UAE, Jordan, Oman, Qatar, Saudi Arabia, Syria and Pakistan.
Gulf Cryo has highly sophisticated manufacturing plants and filling stations, as well as a proprietary pipeline network and tanker fleet, which enable it to produce and transport specialty gases, such as oxygen, nitrogen, argon and helium, in a highly efficient way to a broad customer base operating in a wide range of industries such as oil and gas, glass, food and beverages, healthcare, metals, construction and chemicals.
The industrial gases market in the Middle East has estimated annual sales of US$1.5 billion and has been growing at an average of 12% per year, making it one of the fastest growing worldwide markets for industrial gases. It is a resilient industry sector with growth expected to remain at similar levels, driven by the continuing industrial development in the region.
Mohammed Al Shroogi, Investcorp’s President, Gulf Business, said: “This investment at this time is evidence that Investcorp continues to be successful in finding high quality investment opportunities and developing distinctive partnerships with leading Gulf names. It is also an affirmation that Investcorp is the partner of choice for leading family businesses in this region, and that this region provides many future opportunities for growth for Investcorp.
Mr. Amer Al Huneidi, Gulf Cryo’s Chairman and CEO, said: “My mission has been to develop Gulf Cryo into a truly pan-GCC industrial gases company by making sustained investment in its asset base and by assembling a management team committed to operational excellence, quality standards and customer service. From amongst different alternatives, I chose to form this partnership with Investcorp, as I believe that Investcorp brings unique capabilities that will accelerate Gulf Cryo’s growth and help achieve its full potential.”
Christophe de Mahieu, co-head of Investcorp’s Gulf Growth Capital business, said: “This is the third investment by our Gulf Opportunity Fund. Gulf Cryo is a clear market leader in an attractive sector characterized by high barriers to entry, double digit market growth and resilient margins. The company is extremely well positioned to grow in the future due to its presence across the GGC. I look very much forward to working with Amer and his team on GulfCryo’s organic and add-on acquisition strategies”
This acquisition comes six months after Investcorp’s Gulf Opportunity Fund closed its second investment, a 70% stake in L’Azurde, the world’ fourth largest manufacturer of gold and jewellery and leading Middle East brand, and 12 months after its significant minority stake investment in Redington Gulf, the leading distributor and service provider of IT and telecom products in the Middle East and Africa.