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What’s next for Middle East Glass? Late last month, MENA Glass Holding upped its stake in EGX-listed bottle maker Middle East Glass (MEG) to 93.7% in an EGP 2.8 bn transaction. Now that the dust has settled on the acquisition, we spoke with Middle East Glass CEO Tawfik Laham to learn what’s next for the company.
Remember: MENA Glass Holding acquired an additional 40.2% in MEG after stakeholders agreed to offload 25.1 mn shares. MENA Glass had submitted a mandatory tender offer to acquire an additional 40.8% — 25.5 mn shares — in MEG in a USD 57.8 mn transaction.
MENA Glass bought up Gulf Capital’s stake: Private equity firm Gulf Capital exited the company, selling its entire 36.9% stake. “It is normal for any private equity firm to exit its investment after a certain period of time,” Laham told Enterprise, adding that Gulf Capital was a very good partner that added value to MEG — operationally and financially.
The added value: “Gulf Capital’s growth investment enabled MEG to become the largest glass packaging manufacturer in the Middle East and the second largest in Africa,” the private equity firm said in a statement (pdf). The firm also helped the glass maker double its production capacity, set up new production lines, and increase its exports.
Now that Gulf Capital is out of the picture, what can we expect from MEG? The main objective for the company at the moment is growth — “we are working on setting up our fourth factory and enhancing and improving efficiency in existing plants,” Laham said, adding that the company plans to “significantly” increase its capacity over the coming 3-5 years and expand its exports.
As things stand: The company has three glass factories with 17 production lines and six furnaces. It exports over 50% of its production to over 25 markets, making it one of Egypt’s top five exporters. “The company was the first glass exporter in Africa,” Laham said.
MEG has no plans to exit the EGX, Laham tells us. “We definitely will stay listed … being an EGX-listed company will help us to grow regionally in the future,” he said.
Advisors: EFG Hermes was tapped to broker the acquisition, while Bahaa Eldin Law Office and MENA Associates acted as the buy-side legal advisor. MEG tapped Tanami Financial Advisory as its independent financial advisor to conduct the fair value study, while Arqaam Capital was the sell-side financial advisor and White & Case was the sell-side legal advisor.
