Saudi Arabia's Al Falak plans to acquire firms in region

Saudi Arabian IT service provider Al Falak Electronic Equipment and Supplies is looking for opportunities to invest in and acquire companies in the region. Saudi Arabia, the UAE and Qatar are the countries the company is most interested in, followed by Bahrain, Kuwait, Jordan and Egypt. Last year Al Falak invested in Saudi-based IT distribution company Mishaal Al Sudairy Office for Commercial Services and rSmart, a US-based startup specialising in open source technology for the educational sector. "Normally 20 per cent of the size of the company is earmarked for investments and acquisitions," President Ahmed Ashadawi told Emirates Business. "The value of the company is currently $150 million (Dh550m). The new investments and acquisitions will be completed in the 2009-2010 period." "Al Falak is equipped to acquire companies, adding to the strength of our product line and solutions. The system and methodology is in place and therefore we are able to execute proficiently in terms of speed and accuracy. Enterprise resource planning is our specialisation and we would want to grow through acquisitions." Ashadawi said the US and India were two other attractive markets for investments. "We invested $2m in open source application development in 2008 by taking a 16 per cent stake in rSmart. The applications are targeted at universities and the software will be given free to any university in the world. This has been developed by a consortium of US universities and with this investment the whole world has become a target audience." However, Ashadawi said that going forward the company would not be interested in startup companies unless its investment was protected. There is interest but there are also difficulties as there must be straightforward ways of handling it. "Investor protection is a concern but the US and India would be two countries of high interest. The Gulf is my territory and therefore it would always be on the radar. Al Falak has been in this space for the past 30 years and has ambitions to go beyond the local market. Therefore we are constantly looking for opportunities, especially in Saudi Arabia, the UAE and Qatar." The company's 2008 revenues were $450m and this figure is projected to rise above $500m this year. "The profit projections are difficult as margins are getting thinner in the technology space." Al Falak has 800 employees in Saudi Arabia, Kuwait, Bahrain, the UAE and Sudan. The company has invested in a 18,000 sq m property in Saudi Arabia to expand its IT storage facilities and to house its employees. Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here .