Uptick in GCC private mergers, acquisitions reported in H1

Uptick in GCC private mergers, acquisitions reported in H1
George Traub, managing partner at Lumina.
Updated 04 August 2019

Uptick in GCC private mergers, acquisitions reported in H1

Uptick in GCC private mergers, acquisitions reported in H1

Lumina Capital Advisers Limited, a corporate finance advisory firm specializing in private company M&A throughout the GCC, has released its Q2 2019 Lumina Private Company Index (LPCI), the first private company M&A index covering the GCC. The quarterly report tracks private company average deal valuations across a broad range of sectors across the region.

In addition, Lumina’s latest “State of M&A” survey that analyzed mid-market M&A data from private companies, investment firms and advisers in the region indicates most active sectors as industrials, health care, and consumer with intra-GCC deals accounting for 63 percent of M&A activity and 90 percent of those deals involving either the UAE or Saudi Arabia.

George Traub, managing partner at Lumina, said: “Lumina’s report provides much needed, real-time insights into the often opaque world of private company M&A in the GCC region. The vast majority of private company M&A in the region are sub $100 million, and it is this segment that is least covered by analysts in the market. The LPCI aims to provide this transparency and a barometer of deal activity using Lumina’s proprietary transaction experience in this niche segment.”

“According to respondents to our ‘State of M&A’ survey, the main reasons driving private company M&A are succession planning (46 percent), access to capital (34 percent) and diversification of markets (38 percent). Saudi Arabia is expected to lead the volume of transactions during the remainder of the 2019, based on elevated levels of deals preparations we are seeing from clients, fueled by government-led infrastructure and social reforms,” he added.

Lumina’s report also indicates subdued private equity activity with little to no capital raising activity at fund level in the post Abraaj era. However, secondaries transactions continue to pique international private equity interest, both at a fund and portfolio level, which are expected to drive most of the private equity action in the region.