| Dealflow 2008: BC Partners Acquires Migros; Manara grabs 21% ACT Airlines; Abraaj Capital partners up with Acibadem Healthcare |
| 24 February 2008 |
 Migros Turk Acquired by BC Partners, Ltd.
14 February 2008
BC Partners Ltd., a London-based buyout firm, has agreed to a 1.98 billion liras ($1.7 billion), or 21.85 liras a share leveraged buyout acquiring 51% of Migros Turk AS from Koc Holding AS. BC Partners will also offer to buy out minority stockholders at the same price. This places a value of about $3.2 billion for Turkey's largest supermarket chain.
Some interesting statistics concerning the deal and supermarket/retail in Turkey:
- Migros Turk has 961 stores in Turkey, Azerbaijan, Kazakhstan, Kyrgyzstan and Macedonia.
- The deal values Migros at about 21-times forecast 2008 earnings, according to the average of 18 estimates compiled by Bloomberg.
- BC Partners beat off rival bidders including buyout firms Blackstone Group LP and Kohlberg Kravis Roberts & Co., and Russian billionaire Mikhail Fridman's Alfa Group, as well as Turkey's 2nd biggest retailer - Paris-based Carrefour SA.
- Turkey has attracted about $40 billion of direct foreign investment in the past two years.
- Turkey has 17 supermarkets per million people, compared with 150 in the European Union, according to accounting firm PricewaterhouseCoopers LLP.
Well, this one has long been anticipated, and it looks like even Turkven got a piece in the syndication deal. Well done - considering the recent closing of their TPEFund II. This also makes cash readily availible for Koc Holding who is expected to hit the energy sector hard with the privitaztion of Turkey's electricity producers and distributors.
This also marks the largest private equity deal to date in Turkey as well as BC Partners first entry into the Turkish market. This deal beats the KKR $1.28 billion buyout of UN RO-RO of last year..
To read more ----> Bloomberg: BC Partners to Buy Turkey's Migros for $3.2 Billion (Update4)
AltAssets: BC Partners to acquire Istanbul-listed supermarket chain Migros
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 Manara Investments takes 21% stake in ACT Airlines
05 February 2008
A small cargo fleet of 7 Airbus A300's (2 Airbus A330-200s on order) and 250 employees based in Istanbul, ACT is looking to expand internationally into the MENA region, Eastern Europe, Central and South Asia. ACT was founded in 2004. Total value of the deal was not disclosed.
Manara is a newly established investment vehicle sponsored by four leading Saudi business groups. The four Saudi business groups, together with 3i Group plc, are the sponsors of the Manara Infrastructure Fund LP (MIF), a US$1 billion (target size) private equity fund for infrastructure investments in Islamic countries. It is intended that this investment in ACT will be transferred to MIF upon commencement of business.
To read more ----> Zawya: Manara Investments Acquires 21% Equity Stake in Turkey's ACT Airlines
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Acibadem Healthcare Services Signs 50/50 Joint Partnership with Abraaj Capital
28 January 2008
The basics of the deal:
 Abraaj Capital, a premier investment firm specialising in private equity investment in the Middle East, North Africa and South Asia (MENASA) region, announced that it has partnered with Acibadem Healthcare Services, Turkey's leading healthcare provider, to support its ongoing expansion in Turkey and establish the company's presence in the Middle East.
 Almond AS, a 50:50 joint holding company formed by Abraaj Capital and Mehmet Ali Aydinlar, one of the founders and the Chief Executive Officer of Acibadem, recently acquired a 69.6 per cent stake in the Turkish firm. Abraaj Capital also acquired a 50 per cent stake in leading Turkish health insurance company, Acibadem Sigorta, from Mr. Aydinlar. Abraaj Capital's investment was made through its US$2 billion Infrastructure and Growth Capital Fund (IGCF).
Some real interesting statisics about Healthcare in Turkey:
There are currently twice as many physicians per 1,000 people in the 30 countries within the OECD than there are in Turkey and in the GCC, and nearly three times the available hospital beds. In the GCC states alone, demand for treatment is expected to grow more than two-fold in the next 20 years, to approximately US$60 billion per annum by 2025.
To read more ----> Zawya: Turkey's leading healthcare provider partners with Abraaj Capital to expand services in MENASA
Labels: Abraaj, acquisitions, BC Partners, Buyout, deal flow, Manara, Turkven
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| Blue Voyage Partners Exit AFM Cinemas |
| 04 November 2007 |
As posted in the TDN (Velios buys AFM’s 51.9 percent shares), it appears AIG Blue Voyage achieves an exit from one of their longtime investments after just re-entering Turkey. I'm a bit short of time as of late, so here are the main points from the article:
 Turkish cinema company AFM sold more than 50 percent of its shares to the Velios Ltd., a subsidiary of Russian Alfa Group Consortium Tuesday evening. The estimated price of the shares is to be around $28.5 million, however, the final price will be set after closing.
This led the previous owners of the company, Akdemir family and AIG Blue Voyage Fund L.P., to sell all their shares except for the 10 percent belonging to Ahmet Adnan Akdemir, AFM founder.
A statement made to the Istanbul Stock Exchange (IMKB) said that 51.9 percent of AFM shares (owned by AIG Blue Voyage Fund L.P., Yalçın Selgur, Mehmet Berent Akdemir, M. Sedat Akdemir, Fatma Füsun Akdemir, Ahmet Adnan Akdemir and Yusuf Agah Tansev) were sold to Velios Ltd. for $28.5 million.
AFM's market value
"The market value of the company is around $59 million but for the deal we calculated it to be $55 million. $28.5 million is not the final price, it may change after closing agreements," CEO Akdemir said yesterday.
Ahmet Adnan Akdemir remained a shareholder of the company with 10 percent. "I am also going to remain in his position as the CEO of AFM Sinemacılık for at least two more years," he added.
The deal also included an optional arrangement providing that Ahmet Adnan Akdemir's remaining shares will not be able to purchased within a year but later they will also be open to a sales agreement between two parties.
 Alfa Group is a Russian consortium that is operating on many different business areas, including financial services, oil and gas production, technology, retail trade, telecommunications and media. The consortium is known in Turkey for its investment on Turkish GSM operator Turkcell. As of April 2007, the group together with its telecommunications subsidiary Altimo holds 27 percent of Turkcell shares.
AFM is Turkey's nationwide largest cinema circuit with 183 screens around the country and the first and only entertainment company listed in İMKB since October 2004. Close to 38 percent of the company shares are offered publicly and 90 percent of these publicly offered shares are owned by foreign firms such as Morgan Stanley.
AFM is expected to continually expand, especially with this new Russian partner, and a burgeoning shopping center boom in Turkey. I find it interesting (and a coincidence?) that just my last post was regarding the AIG Blue Voyage Fund (AIG Rehires and Re-Enters Turkish Buyout Market with Blue Voyage Advisors). It can only be speculated that the rehires and Blue Voyage's resurgence back in Turkey may have been tipped off by the momentum of this deal.
AIG originally bought a minority holding into AFM for an estimated $7 million in 2000. Again, we can only speculate on their rate of return (if any) on this deal, since there are others involved in the exit.
 Technorati Tags: AIG, Blue Voyage Fund, Private Equity, Investments, Deal Flow, Turkey, Buyout, Alfa Group, Venture Capital, exitsLabels: AIG, Alfa Group, Blue Voyage Fund, Buyout, exits, Investments, Private Equity, Turkey, Venture Capital
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| AIG Rehires and Re-Enters Turkish Buyout Market with Blue Voyage Advisors |
| 21 October 2007 |
According to the Wall Street Journal, AIG is again making a push to enter the Turkish buyout/venture space. Setup in 2000, the AIG Blue Voyage Fund was a $100m (€72m) fund dedicated to private equity investing in Turkey.
Of course you may remember that those were tough times to put together a fund {with the country nearing elections, the 2001 crisis, and the devaluation of the lira}. Nonetheless, the spirit of putting together a private equity fund in Turkey was commendable and they were able to make three acquisitions of companies in the consumer and entertainment sectors which included AFM Theaters and Galatasary Sportif by 2004. Perhaps it was the trouble with board member shifts at Galatasaray that made them lose heart? Even so, the fund deliberately slowed its investment pace from 2002 to 2004 and by 2005, the fund closed with only 30% of its capital committed. Aside from Blue Voyage, however, last year AIG Capital was able to regain some ground in Turkey, taking a stake in For You, a discount fashion retailer with branches across the country.
Well, that was then and this is now. Serkan Elden, who spent six years setting up AIG's business in Southeast Europe, has been rehired to fill the post of president and chief executive for Blue Voyage Advisors. He will also be given the title of managing director of AIG Capital Partners, and will be responsible for boosting the firm's investment activity in Turkey. Elden originally left AIG Blue Voyage in 2004 to setup his own boutique investment advisory firm, 3 Seas Capital Partners, a firm that still exists today. From there, he became chief executive of Fintur Holdings BV, a joint venture of Turkcell and TeliaSonera, and a provider of mobile telecommunication networks servicing Azerbaijan, Kazakhstan, Georgia and Moldova.
So, per my last post regarding KKR's acquisition of UN Ro-Ro, and re-emergence of the AIG Blue Voyage Fund, it is interesting to note the direction of the trend. Again, we will have to wait and see who in Turkey is ready for the next buyout deal, and who will enter next.
For future reference, all of these Turkish funds and PE firms can be found in the PE/VC Index in the left sidebar.
Technorati Tags: AIG, Blue Voyage Fund, Private Equity, Investments, Deal Flow, Turkey, Buyout, Southeastern Europe, Venture CapitalLabels: AIG, Blue Voyage Fund, Buyout, Investments, Private Equity, Southeastern Europe, Turkey, Venture Capital
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| KKR Makes First and Largest PE Investment in Turkey |
| 14 October 2007 |
In September, some suprising news came out that KKR (Kohlberg Kravis Roberts & Co) was attempting a takeover bid for the Turkish UN Ro-Ro shipping firm. Well, news has just been released coutesy of Reuters (KKR buys 98 pct of Turk shipper in $1.28 bln deal) and Forbes (KKR Ro-Ros To Turkey) that the deal has gone through. KKR will purchase a 97.6% stake worth 882.2 million euros ($1.2 billion) from the consortium of international shippers. While this may pose as a landmark deal for private equity enthusiasts such as myself, not to mention the largest private equity deal ever to be done in Turkey, KKR first appeared to have bitten off more than they could chew. In September, there was negative speculation both from Chairman Saffet Ulusoy (who said that he would never sell) and the Turkish Armed forces as to the selling-off of national security interests.
 UN Ro-Ro, a roll-on/roll-off shipping company, owns 9 ships and was founded in 1993 during the Yugoslav-Balkans War - a war that closed overland shipping routes connecting Turkey and Europe. The ships sail daily from the port of Ambarli-Pendik, Turkey carrying lorries and container vehicles filled with Turkish goods to Trieste, Italy.
Speaking on the deal, KKR's John Pfeffer commented, "We believe in the growth of trade between Turkey and Europe and U.N Ro-Ro’s important role in that development. We are very interested in the Turkish market and believe that private equity can play a helpful role by investing to support the growth of businesses. This is our first investment here, and we hope to find other investment opportunities in the future."
On one hand, this type of deal with a large private equity player coming to Turkey was inevitable. The economy is still holding on, the elections are over, and Southeastern Europe funds have been circling around Turkey for quite some time now. The Forbes article makes an interesting comment concerning the increased desire for private equity deals in emerging markets due the "lack of appetite for credit to finance more expensive acquisitions in developed markets."
On the other hand, Golden tier US funds are currently on the fence and gaming to set up new offices or affiliates in Europe. For example, DFJ has bought a stake in European Esprit Capital Partners and has also just launched a VC fund in Russia. In addition, AIG has made motions and new hires to launch back into Turkey (more on that later). It seems even with the bubble bursting 7 years ago in the US, and with different cultures between US and European private equity deals, the US funds are willing to give it another go. It should be interesting to see if Europeans are still open to the idea and which firm will be next.
But for Turkey, this large scale private equity deal should send signals to other large international players and make them take note. The advantage will remain with those firms (both legal and consulting) on the ground in Turkey that have the resources to spot and get the deals, not to mention the large Turkish firms with buyout potential.
Technorati Tags: KKR, DFJ, Private Equity, Investments, Deal Flow, Turkey, UN Ro-Ro, Takeovers, Shipping, AcquisitionsLabels: Buyout, deal flow, DFJ, Emerging Markets, KKR, Private Equity, Shipping, Takeovers
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Publisher: Jon H. Black
