Published: July 8, 2009
Actis, an emerging markets private equity investor, has executed an agreement to invest US$244mn to acquire shares in Commercial International Bank, a leading bank in Egypt.
London-based Actis is acquiring 50% of the stake held by the consortium led by Ripplewood Holdings. The transaction makes Actis the largest single shareholder in CIB with a 9.4% stake.
EFG-Hermes Investment Banking acted as the sole financial advisor to Actis on this deal, which stands as the largest M&A transaction in Egypt for the year.
Commenting on the transaction, Actis senior partner Paul Fletcher says: “Actis is committed to the financial services sector as one of our core investment strategies within emerging markets where Egypt stands out for its excellent growth potential.”
Fletcher continues: “Within Egypt, CIB is the market leading bank, perfectly positioned to achieve significant growth by extending its services into the retail banking sector. We hold the management team in high regard and are delighted that CIB has become an anchor investment for our Actis Emerging Markets 3 fund. CIB is committed to a high standard of governance and corporate ethics that sits perfectly with Actis’s own stringent investment practices.”
CIB has a 35-year track record in commercial banking and is planning to expand further into the retail sector. The country’s 76mn inhabitants and its burgeoning middle class of consumers are creating a strong demand for modern personal finance and savings products.
Timothy Collins, founder and CEO of Ripplewood, comments: “We are extremely proud of our relationship with CIB and with its board, management and employees. We have long believed that CIB and the Egyptian banking sector have not been fully appreciated by investors in mature markets and therefore offer an exceptional investment opportunity.”
According to Actis, the firm seeks to identify attractive opportunities in Egypt by using its local base on the ground, together with its global financial services team to find the best overall environments for investment.
Egypt has a resilient, growing economy and a strong regulatory banking environment. By enforcing conservative policies, Egyptian banks have performed strongly, despite the turmoil in global banking markets, making Egypt one of the most attractive banking environments in the world.