Expanding its presence in financial services in the GCC, Al Hail Holding LLC (Al Hail) has announced the acquisition of a majority stake in MAF ORIX Finance PJSC (MAF ORIX). Established in 2002, MAF ORIX is a joint venture between Majid Al Futtaim Ventures LLC (MAF Ventures) and ORIX Corporation of Japan.
With this acquisition, Al Hail and ORIX Corporation have entered into a long term alliance regarding cooperation in leasing and other financial services in the UAE.
MAF ORIX Finance provides lease financing for movable assets to the corporate sector in the UAE with particular emphasis on the expansion needs of SMEs. Movable assets include industrial and medical machinery, heavy equipments, office equipments and commercial vehicles. The company also provides factoring, business loans, fleet leasing and warehouse financial solutions. Established since 2002, the company has a customer base of over 1000 lessees from diversified sectors of the UAE economy. The company’s head office is based in Dubai with branch offices located in Abu Dhabi and Sharjah.
Through its acquisition of MAF Ventures’ 60% stake in MAF ORIX, the Abu Dhabi based Al Hail continues to extend its footprint in the financial services sector. Al Hail, a relatively young investment firm, has made significant strides in developing and diversifying its portfolio and has emerged as one of the leading investment companies in the UAE with investments across healthcare, education, infrastructure, retail, real estate, financial services, communication, power & energy and technology.
ORIX Corporation is the largest diversified financial services company in Japan with operations in 34 countries outside of Japan and an asset base in excess of $89bn (as at March 31, 2013). It is the pioneer of leasing in Japan and many Asian and Middle East countries. Its business interests include investment banking, property development and finance, life insurance, asset management, aircraft leasing and management. In the USA, ORIX is the majority owner of an investment bank, Houlihan Lokey, and a fixed income asset management company, Mariner Group. Recently, ORIX acquired an asset management company, Robeco, from Rabobank in a deal worth EUR1.94bn. In this region, ORIX has invested in leasing companies in the UAE, Saudi Arabia, Oman, Egypt and Pakistan.
The acquisition comes close on the heels of an upswing in the SME sector in the UAE. Indeed, indicators show that the general market confidence is returning, hence the significant pool of opportunities across a number of sectors including industrial and semi-industrial or manufacturing businesses, infrastructure and construction businesses, consulting sectors and key commercial trade areas. Further, the Federal National Council recently passed a draft law on SMEs that facilitates the promotion and development of these enterprises. This development promises growth potential and high financial returns to SMEs and also offers significant opportunities for GCC-based financial institutions. Al Hail recognizes that this draft law will be a positive catalyst for the SME sector as a whole, and is positioning itself to contribute to the industry through this timely acquisition.
Commenting on the announcement, Hamad Jassim Al Darwish, CEO of Al Hail, stated, “We believe this acquisition will significantly contribute to the development of our financial services business. The acquisition will enable Al Hail to access the small and medium-sized enterprises (SMEs) and is an important step towards strengthening our position in a highly competitive industry in the UAE. We will benefit from the expertise of ORIX to facilitate our growth in this sector.”
Al Etihad Financial Advisors LLC (Al Etihad Advisors), a joint venture between Al Hail and Al Masah Capital Limited, advised on the transaction; Al Etihad Advisors is licensed by the Emirates Securities and Commodities Authority (ESCA) to carry out financial advisory and financial analysis coverage in the UAE.
Regarding the transaction, Shailesh Dash, CEO of Al Masah Capital Limited and Board Member of Al Etihad, commented, “At Al Etihad Advisors, we are pleased to have closed our first advisory transaction shortly after our establishment, which bears testimony to our capabilities and commitment towards meeting the objectives of our clients. We look forward to building on this and strengthening Al Etihad Advisors’ position as the ‘advisor of choice’ for our clients.”
Al Masah Capital Limited is a MENA focused alternative investments asset manager with special focus on social infrastructure initiatives and promoting private equity investments in important sectors including healthcare and education. In addition, Al Masah Capital Limited manages several other lines of businesses such as asset management, real estate, and investment research. Al Masah Capital Limited, which specializes in private equity, has grown rapidly since its inception in 2010, and now also offers advisory services to its clients.