This is the first part of $1 billion fund the company has set for investment in Pakistan. :k:
**Abraaj Capital inaugurates its US$ 300 Million Abraaj BMA Pakistan Buyout **
The acquisition of the 80% stake in MS Forgings marks the first investment by the Abraaj BMA Pakistan Buyout Fund L.P. which was announced earlier in the year and had its first closing on June 2006. Founded in 1974, MS Forgings has evolved into the leading supplier of steel forged components for the domestic automotive industry. The automotive industry has seen tremendous growth over the past five years with the market for locally assembled vehicles growing at over 30% per annum. Analysts expect current growth levels to continue largely on the back of the macroeconomic growth in the Pakistan economy and the continued proliferation of automobile financing. By identifying the global outsourcing trend in the automotive parts industry early on, MS Forgings has focused on high quality production in-line with international standards and has developed a unique export capability. Roughly 50% of revenues are from exports to major automotive markets such as the Europe and the US. Going forward, MS Forgings is looking to further leverage this trend and is considering strategic acquisitions within Pakistan as well as in established markets such as Europe and the US as a means to widen its customer base and to capture additional market share internationally.
‘The automobile component industry in Pakistan represents one of the most attractive growth sectors in the economy’ said Arif Naqvi, CEO and Vice Chairman at Abraaj Capital. ‘We believe that MS Forgings through its leadership position and existing export base is especially well-positioned to become one of the top players globally in this high-growth segment’ added Naqvi. ‘One of the key mandates of our Fund is to create globally competitive businesses through the numerous consolidation opportunities available in fragmented industries in Pakistan. MS Forgings is the ideal platform on which to help consolidate the automobile component industry’ said Tom Speechly, Executive Director at Abraaj Capital. ‘We are extremely excited about this partnership with Abraaj’ said Shahid Khan, CEO at MS Forgings. ‘Their regional experience with businesses within Pakistan and the Middle East will add enormous value to the existing base at MS Forgings and help take us to the next level of growth’. ‘The Abraaj BMA Pakistan Fund is the largest private equity fund ever to target investments in the country,’ added Farrukh Khan, CEO of BMA, one of the leading investment firms in the country and along with Abraaj Capital, a shareholder in the domestic investment manager to the Fund. ‘While there are clearly multiple opportunities for consolidation across Pakistan, the fund is focused on quality transactions like MS Forgings where we can build on strong, existing assets, and add value for both partner companies and shareholders.’ ‘Pakistan is one of the most attractive emerging markets for private equity investment, yet has largely been overlooked by all of the global private equity majors. The opportunities for private equity involvement in firm consolidation, expansion capital, and government privatizations are superb. We possess a robust deal pipeline currently and expect to close a number of high quality transactions such as MS Forgings over the coming months’ added Moazzam Malik, Managing Director at BMA.