Investcorp diversifies portfolio with acquisition of American stationery retailer and Saudi Arabian car rental company - IFN

Investcorp diversifies portfolio with acquisition of American stationery retailer and Saudi Arabian car rental company

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GLOBAL: Bahrain’s Shariah compliant investment firm Investcorp has contracted two investment ventures in Saudi Arabia and North America. In an investment spree, the company purchased a 30% stake in Theeb Rent a Car Co, the second-largest car rental services provider in Saudi Arabia, and Paper Source, a leading stationery retailer in the US via its Gulf Opportunity Fund. Under the terms of the acquisition, the fund will be represented on Theeb's board and play an active role in key decisions which will include both governance as well as future exit strategies. Commenting on the transaction, Walid Majdalani, the managing director of MENA corporate investments at Investcorp, said: “The company's growth prospects, given its leading position in a sector, is estimated at circa US$1 billion and has witnessed a double digit growth over the last five years.” In terms of revenue and net income, Theeb has recorded more than 17% growth over the past three years. In another deal, Investcorp acquired Chicago-based Paper Source from Brentwood Associates, a private equity firm. Paper Source is a market-leading retailer with a diversified pool of product offerings, with 73 stores currently operating across 23 states in the US. In a statement, Sally Pofcher, the CEO of Paper Source, said that the transaction provides the company with a deep capital base for it to expand domestically and pursue direct marketing opportunities. For the financial year ended the 30th June 2013, Investcorp witnessed a 56% accretion in its net income year-on-year to US$104.9 million from US$67.4 million in 2012. Its gross operating income increased by 35% to US$361.8 million compared to US$267.1 million last year. Having acquired eight new corporate investments in the past 12 months, the company which has over US$10.5 billion in assets under management is also said to be looking to establish offices in Abu Dhabi and Doha upon receiving regulatory approval.