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Metito enters into partnership with Japanese firms

on Jul 8, 2014

(From left) Ken Kobayashi, Shunichiro Miyanaga, Tadashi Maeda, Mutaz Ghandour, Karim El Solh, and Noriaki Mizuno.
(From left) Ken Kobayashi, Shunichiro Miyanaga, Tadashi Maeda, Mutaz Ghandour, Karim El Solh, and Noriaki Mizuno.

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Metito Holidings Ltd. (Metito) has entered into a strategic partnership with Japanese companies Mitsubishi Corporation (MC), and Mitsubishi Heavy Industries, Ltd. (MHI), as well as Japan Bank for International Cooperation (JBIC) that will see significant investment into Metito and thereby boost its growth.

The partnership comprises a share purchase agreement with MC and MHI, which will acquire 38.4% of Metito shares, predominantly from its existing shareholder Gulf Capital.

JBIC will also subscribe as a preference shareholder, providing Metito with additional funds of up to $92mn to fund growth opportunities.

Commenting on the new partnership, Mutaz Ghandour, CEO, Metito, said: “MC and MHI are exceptional companies. We are excited to be partnering with them to implement our strategic plans for growth and to seize the opportunities that await us, as we fully utilise our varied synergies.”

“Metito is already well poised to tap into projects of various scales, and this partnership, in addition to the investment by JBIC, will expedite the company’s growth through creating new opportunities and allowing us to become more competitive, globally,” Ghandour said.

Masaji Santo, senior vice president, division COO, MC, said: “This investment is ideal for us as it creates a compelling strategic partnership capitalising on our global network and corporate capabilities and Metito’s unique value proposition.”

“The numerous mutual benefits stemming from this deal will ensure world class water solutions are brought to new markets, benefitting more people in a stronger and sustainable manner,” Santo said. “Metito’s long established expertise and local presence in strategic emerging markets will be an advantage when looking to secure further development opportunities in water challenged areas that offer massive growth potential.”

Yoichiro Ban, senior general manager, MHI, said: “This is a synergistic partnership with Metito’s strengths enhancing ours and vice versa. Working together will enhance MHI’s business and open many new opportunities, particularly in the emerging markets where Metito is well positioned as a leader in the water and wastewater sector.”

“The operational capabilities along with the combined local and global expertise of all the partners, paired with the strong financial backbone will drive this business, making it a fruitful and complementary partnership,” Ban added.

Masaaki Yamada, director general, power and water finance department, infrastructure and environment finance group, JBIC, stated: “This investment is very much in line with our mandate to support Japanese companies looking to invest in emerging markets.”

“In recent years, Japanese companies such as MC and MHI have had an increased appetite for expansion in the Middle East and GCC region,” Yamada explained. “JBIC supports this development, and in this case subscribed as a preference shareholder in Metito to provide the company with stable financing to fund new growth opportunities.”

The deal will see MC and MHI acquire a total of 38.4% stake in Metito, and Gulf Capital and the International Finance Corporation (IFC), a member of the World Bank Group, will continue holding 23.8% and 3% of Metito respectively.

Karim El Solh, CEO and managing partner of private equity, Gulf Capital, and serving chairman of the Board of Metito, said: “This strategic investment into Metito by MC, MHI and JBIC is a reflection of the success of the management team and the Ghandour family.”

“This collaboration between a long established family business and a leading regional private equity firm, and its evolution into this new partnership with MC, MHI, and JBIC, serves as a model template for future regional investments into family owned businesses in the Middle East,” El Solh said.

Since Gulf Capital’s initial majority investment in Metito in 2006, the company has been able to increase its net profitability by 661%. It has also earned a name for itself as being a leading provider in the global water and wastewater industry, registering an annual compound growth rate of 17% in revenues, 32.3% in EBITDA and 33.6% in net profits over the last eight years.