Orascom Construction Plc has announced its intention to acquire a leading company operating an equipment importation, distribution and services business in Egypt.
Orascom Construction is a leading global engineering and construction contractor founded by the late Egyptian industrialist Onsi Sawiris, who died on June 29 at 91.
OS Private Trust Company holds a 51.8-percent stake in the Egypt-based contractor for the benefit of the Sawiris family. At the same time, Egypt’s wealthiest man Nassef Sawiris owns a 28.97-percent stake in the group, which amounts to 33,825,323 ordinary shares.
His stake in the company makes him the single largest individual shareholder.
The acquisition deal for the company, which is estimated at $35 million, is subject to regulatory approval by the Egyptian authorities. A shareholder vote on Dec. 27 will confirm the deal.
Information confirmed by Billionaires.Africa revealed that the Sawiris family wholly owns the target company and, as a result, the family will abstain from voting.
According to the Egypt-based group, the formal announcement came after the board of directors approved the management’s proposal in October to formally evaluate the potential acquisition and impact on the group’s non-engineering procurement and construction (non-EPC) business.
The deal will unlock value for the family and provide a platform for Orascom Construction to expand in the services sector and grow the group’s non-EPC business in a complementary field, while serving as a launching pad for the target company’s next phase of growth.
The target company operates an asset-light importation, distribution and maintenance business model. Its operating portfolio includes leading original equipment manufacturers such as Grove, John Deere, Volvo Penta, Hitachi and Mitsubishi Heavy Industries.
Upon acquiring the target company, the board expects mutual benefits through collaboration in operations, capital investment and financial optimization.
As of press time, Nov. 7, shares in Orascom Construction on the Egyptian bourse were trading at EGP71.7 ($4.560 per share), up 116 basis points from their opening price this week.
Since the year began, its stock price has been down by nearly 14 percent, giving the group a EGP8.37-billion ($532.7 million) market valuation.
In the first nine months of 2021, the group reported a 4.1-percent growth in revenue from $2.44 billion to $2.54 billion, while its net income attributable to shareholders rose by 17.1 percent from $65 million to $76.1 million.
