UAE-based investment company Abraaj Group has agreed to sell its 49 per cent stake in UAE-based electronic payments firm Network International (NI) to US private equity firms Warburg Pincus and General Atlantic.
This follows a plan announced earlier by local lender Emirates NBD that it was considering an intital public offering (IPO) for NI.
Emirates NBD will continue to own 51 per cent of NI after the sale.
A statement issued by Abraaj on 26 November did not give a clear reason for the sale, other than saying it managed to validate a thesis in 2011, when it bought the shares for $539m that there was a major growth opportunity for the company. NI currently operates in 40 countries across the Middle East and Africa (MEA) region.
The value of the sale was not disclosed. Injections of cash from Western private equity firms into the Middle East is seen as uncommon, with the reverse trend being the norm.
About 80 per cent of NIs revenues are understood to be accounted for by the UAE, where it maintains a 70 per cent market share, and the new Western shareholders are keen to expand the companys revenues from its international operations.
NI focuses mainly on merchant acquiring services, where it processes transactions for merchants covering online, offline and mobile. The Western investors interest is contingent upon the gradual but ongoing migration from cash into electronic payment transactions across the MEA region.
The US Gibson, Dunn & Crutcher advised Emirates NBD, while transaction advisers for Warburg Pincus and General Atlantic include the UKs Freshfields Bruckhaus Deringer; and the US Paul, Weiss, Rifkind, Wharton & Garrison; Perella Weinberg Partners; Morgan Stanley; and Citi.