DIC acquires UK firm

06 January 2006
Dubai International Capital (DIC), the international investment arm of Dubai Holding, has acquired UK-based engineering firm Doncasters Group from Royal Bank of Scotland Equity Finance (RBEF) for about£700 million ($1,217 million). HSBC advised DIC on the transaction while RBEF was advised by Lazard.

Doncasters has 25 manufacturing facilities and four main business lines - aeronautics, industrial gas turbines, medical equipment and turbochargers. 'All the sectors show significant opportunities for growth,' says Sameer al-Ansari, chief executive officer of DIC. 'On all our acquisitions we look for solid cashflow, strong management and expansion potential, both organic and inorganic. As soon as the deal is closed, in two-to-three months, we will start looking at potential acquisition targets for Doncasters.'

DIC will buy 100 per cent of the firm through an estimated debt/equity mix of 60:40. As was the case with to the £800 million ($1,392 million) acquisition of The Tussauds Group, a global operator of tourist attractions, in March 2005, Doncasters was brought to DIC's attention by HSBC as part of an ongoing mandate. 'There is no shortage of deals around,' says Al-Ansari. 'We have had a glance at about 100, looked carefully at about 20 and done detailed due diligence on about 10. But we are under no pressure to invest, and just because we have deep pockets doesn't mean we are going to pay any price'.

DIC's other major investments are stakes in German car manufacturer DaimlerChrysler, Amman-based investment firm JD Capital and Ishraq, a special purpose company set up to manage a chain of Holiday Inn Express hotels across the GCC (MEED 14:10:05, Briefing). It is also one of three bidders for DaimlerChrysler's heavy diesel unit MTU Friedrichshafen, in partnership with private equity firm Kohlberg Kravis Roberts. 'A decision is very imminent,' says Al-Ansari.

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