Akanar expects M&A activity in Egypt to rise

Corporate finance advisers Akanar Partners, which is working on six merger and acquisitions deals in Egypt, predicts more transactions with economy improving and from the consolidation of family-run businesses.

Akanar, which specialises in mid-market mergers and acquisitions, has closed two transactions since its five founders quit Egyptian investment bank Beltone Financial in mid-2009 and started up their operation in October.

It is working on six M&A mandates and is negotiating another seven to 10, company executives said.

"We are optimistic about 2010. We think the economy came out pretty well from the financial crisis," said Tarek Abdel Rahman, one of Akanar's five founding Managing Directors.

Egypt's economy has proved resilient despite the world downturn.

The government forecasts growth in the financial year starting July 1 of 5.5 per cent after an expected five per cent in 2009/2010, in line with independent forecasts.

The Egyptian M&A market started slowly with a privatisation programme in the mid-1990s, then gained momentum with further economic reforms introduced since 2004.

Abdel Rahman saw the pace picking up as private equity funds and investors consolidate Egypt's fragmented industry.

"We have not seen local firms being consolidated," he said. "Most family firms are generation one or two. The management is the same as the owners. But with the new generation, this will begin to die away.

"We found what was missing was the mid-market mergers and acquisitions. The big firms were covering only the big deals," he said.

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