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Metito forms partnership with Mitsubishi Corporation, Mitsubishi Heavy Industries, and JBIC.

Metito Holdings, Ltd. (Metito) has entered into a partnership with Japanese companies Mitsubishi Corporation (MC), and Mitsubishi Heavy Industries, Ltd. (MHI), as well as Japan Bank for International Cooperation (JBIC), which will see significant investment into the company.

The partnership comprises a share purchase agreement with MC and MHI, which will acquire 38.4 per cent of Metito shares, predominantly from its existing shareholder Gulf Capital. JBIC will also subscribe as a preference shareholder, providing Metito, a capital intensive business, with additional funds of up to $92 million to fund growth opportunities. This investment aims at supporting overseas business deployment of Japanese companies, establishing a strategic partnership between the MC, MHI and Metito.

Such deal will strengthen the ties between the Middle East and Japan in the water and wastewater industry, and will further build a leading and competitive working platform in emerging markets. The partnership also generates synergy merits in a range of areas, including financial strength and capability, complementary experience and global networks, business development opportunities and operational capability.

Mutaz Ghandour, CEO, Metito, said: "MC and MHI are exceptional companies. We are excited to be partnering with them to implement our strategic plans for growth and to seize the opportunities that await us, as we fully utilise our varied synergies. Metito is already well poised to tap into projects of various scales, and this partnership, in addition to the investment by JBIC, will expedite the company's growth through creating new opportunities and allowing us to become more competitive, globally."

Masaji Santo, Senior Vice President, Division COO, MC, said: "This investment is ideal for us as it creates a compelling strategic partnership capitalising on our global network and corporate capabilities and Metito's unique value proposition. The numerous mutual benefits stemming from this deal will ensure world class water solutions are brought to new markets, benefitting more people in a stronger and sustainable manner. Metito's long established expertise and local presence in strategic emerging markets will be an advantage when looking to secure further development opportunities in water challenged areas that offer massive growth potential."

Yoichiro Ban, Senior General Manager, MHI, said: "This is a synergistic partnership with Metito's strengths enhancing ours and vice versa. Working together will enhance MHI's business and open many new opportunities, particularly in the emerging markets where Metito is well positioned as a leader in the water and wastewater sector. The operational capabilities along with the combined local and global expertise of all the partners, paired with the strong financial backbone will drive this business, making it a fruitful and complementary partnership."

Commenting on this, Maski Yamada, Director General, Power and Water Finance Department, Infrastructure and Environment Finance Group, JBIC, stated: "This investment is very much in line with our mandate to support Japanese companies looking to invest in emerging markets. In recent years, Japanese companies such as MC and MHI have had an increased appetite for expansion in the Middle East and GCC region. JBIC supports this development, and in this case subscribed as a preference shareholder in Metito to provide the company with stable financing to fund new growth opportunities."

Gibson, Dunn & Crutcher LLP represents Metito Holdings and Gulf Capital. Richard Dallas, Managing Director of Private Equity for Gulf Capital, commented: "Although this may not be the largest private equity transaction of the year, it was certainly the most complex. The transaction required a delicate balancing of many interests - two of the largest and most prominent Japanese corporations, Gulf Capital, as the controlling financial sponsor, two international developmental financial institutions - IFC and JBIC -Metito and the Ghandour family, who founded the company over 50 years ago and who have been prominent in its management up to today. Metito and Gulf Capital were represented by Gibson, Dunn & Crutcher, by a team led by Dubai managing partner Paul Harter, without whose technical expertise and extensive international M&A experience the deal would not have gotten done. Mitsubishi Corporation, Mitsubishi Heavy Industry and JBIC were very adroitly represented by teams from Allen & Overy, Dubai and Tokyo. Our financial advisors, TC Capital, were instrumental in bridging the large and frequent business and cultural gaps that stood between us and a successful transaction."

In addition to Paul Harter, Gibson Dunn's team includes Hanna Chalhoub, corporate associate in the Dubai office.

Allen & Overy's team includes Andrew Schoorlemr, Fraser Dawson and Michael Dennison for Mitsubushi Corp and Mitsubishi Heavy Industries.

The deal will see MC and MHI acquire a total of 38.4 per cent stake in Metito, and both Gulf Capital and the International Finance Corporation (IFC) -a member of the World Bank Group - continue holding 23.8 per cent and 3 per cent of Metito, respectively.

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Publication:CPI Financial
Date:Jul 8, 2014
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