Misr Capital tripled its money exiting Nile Scan through an LP swap with Elevate

Misr Capital triples its money on Nile Scan exit: Private equity firm Elevate Capital has inked a definitive agreement that will see Misr Capital — the investment arm of state-owned Banque Misr — exit Nile Scan and Labs for just under EGP 1 bn, in what Elevate Group CEO Tarek Moharram describes to EnterpriseAM as an LP swap. “Misr Capital offloaded its investment to a new set of investors raised and managed by Elevate,” Moharram says.

Three years and 3x later: The transaction, pending regulatory approvals, implies a roughly 3.2x allcash return on the EGP 312 mn Misr Capital paid for its 70% stake back in 2023, by our math. Elevate never owned Nile Scan outright; it controlled the company only by managing Misr Capital’s investment in it, Moharram tells us.

SOUND SMART- An LP swap is when one investor exits and another steps into the exact same position, without the underlying business changing hands. The fund manager — Elevate, in this case — stays the same; only the investor changes. Misr Capital cashes out, a new group of investors buys in, and Nile Scan itself isn’t sold.

REFRESHER- Elevate first floated a full buyout of Nile Scan in March 2023, before Elevate Healthcare — a JV between Elevate and Misr Capital — acquired 70% of the clinical radiology and lab services provider in June of the same year. Nile Scan was founded in 1995 by the late Hazem Moharram, Tarek Moharram’s father, and currently operates more than 20 centers serving over 150k patients.

The vehicle that owns Nile Scan hasn’t changed. A mix of local and foreign high-net-worth individuals invested in Elevate Healthcare to fund the swap, alongside members of the Moharram family, the CEO tells us. Post-transaction, Elevate Healthcare will still hold 70% of Nile Scan, with the family holding the remaining 30%.

What’s next: Elevate plans to break into new markets and build out its wider healthcare portfolio by lining up fresh capital beyond this transaction, Moharram tells us, with indicative offers on the table from local and international equity and debt investors looking to back the expansion. For Misr Capital, Moharram characterizes the exit as simply a matter of monetizing its investment.

ALSO- An EGX listing is in the cards: Nile Scan is eyeing an IPO in the next two to three years, depending on market conditions, Moharram tells us, though the timeline and size of the float remain under wraps.

Banque Misr sheds some wool

Banque Misr exits Goldentex Wool: State-owned commercial lender Banque Misr has offloaded its entire 9.3% stake in EGX-listed textile manufacturer Golden Textiles (Goldentex Wool) in a two-stage exit for a total consideration of EGP 135.5 mn, by our math, according to two separate bourse disclosures (here, pdf and here, pdf).

ADVISORS- CI Capital’s brokerage arm, Commercial International Brokerage (CIBC Securities), executed the transaction.