Istanbul- Securing a foothold in the Turkish banking sector, private equity firm Abraaj Group announced on Monday that it has acquired a minority stake in Fibabanka. The firm also announced that it is looking forward to two or more deals later this year.
Private equity transactions have plummeted in Turkey due to political instability, security concerns and a struggling currency, which make it harder to lure new investors and to exit investments profitably.The Abraaj Group is a private equity investing firm operating in emerging markets of Africa, Asia, Latin America and the Middle East.
However, Abraaj’s move to buy a 9.95 percent stake in Fibabanka is a move made only days after British private equity firm Bridgepoint bought Turkish dried fruit and nuts producer Peyman in a deal sources said was worth some $110 million. Fibabanka will use the investment by Abraaj, which has about $9 billion in assets under management, to expand its franchise and support its growth, Abraaj said in a statement.
“The Turkish banking sector loan book has increased tenfold in the last decade, yet Turkey remains an under-leveraged market with a household debt to GDP ratio that is approximately a third of the Eurozone average,” said Selcuk Yorgancioglu, Partner and Regional Head of Turkey and Central Asia at The Abraaj Group.
Details of the Fibabanka deal were not revealed, although Abraaj said that following the investment it will have deployed around $900 million of capital in Turkey since 2007, including dairy products maker Yorsan and Turkey’s largest e-commerce company Hepsiburada.com.
“We aim to close at least one, possibly two or three more deals this year. We love healthcare. People don’t postpone their healthcare spending. We also love FMCG (Fast-moving consumer goods). For us in FMCG, from food to diapers, everything is attractive. Although we look into B2B, we are keen on B2C,” Yorgancioglu said in an interview.
Fibabanka was acquired by Fiba Group, which was established by Turkish businessman Husnu Ozyegin, in 2010 and the EBRD and IFC each own 9.95 percent stakes. Fiba Group is also involved in real estate, retailing, hotel management and energy.
Abraaj said Fibabanka has 70 branches across 18 cities in Turkey, total assets of $4.3 billion and a loan book of $3.2 billion at the end of the first quarter, with a focus on commercial, corporate and SME customers.
Turkish merger and acquisition activity has also been subdued, with only 41 transactions in the first four months of this year in the country, according to data from Ernst & Young, the lowest level since 2009, during the global financial crisis.
Abraaj Group Takes Foothold in Turkish Banking Sector
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