Construction

Investcorp acquires 35% in Kuwaiti leasing firm

Automak operates 4,500 strong fleet serving the Gulf State’s oil and gas and public sectors

Investcorp, the Bahrain owned provider and manager of alternative investment products, announced on Sunday that it had acquired a 35% stake in Automak, a vehicle leasing and rental company in Kuwait.

The definitive agreement signed between Investcorp’s Gulf Opportunity Fund and Automak will see a capital injection into the leasing firm, which already owns more than 15% of the Kuwait market.

With a fleet in excess of 4,500 vehicles in operation, Automak provides a wide spectrum of services and products to a number of industries, including vehicle leasing, rentals, quick service and distribution of spare parts, tires and lube oil to public ministries, oil and gas companies and multinational companies.

“Automak is our sixth investment in the region and our second in a strong and established Kuwaiti company. We believe it is a market leader in an attractive sector with a robust business model and is well positioned to growth globally and regionally,” said Mohammed Al Shroogi, Investcorp’s president of Gulf Business.

The vehicle rental and leasing sector is a growing industry in the GCC region as companies look to de-lever their balance sheets. As a result, they favour renting fleets of vehicles versus ownership.

In Kuwait, the sector is expected to sustain its strong growth on the back of favourable demographics, further expansion of the oil sector and increased government expenditure. This trend is expected to continue across the GCC and the wider MENA region.

“In just ten years, Automak has been able to establish itself as one of the largest players in the Kuwaiti vehicle leasing sector. We believe that Investcorp will be instrumental in the success of our next phase of growth,” said Ghazi Omar, vice chairman of Automak.

“Our solid track record and enhanced equity base combined with Investcorp’s strategic support will help accelerate Automak’s growth in Kuwait and abroad. We see tremendous potential in corporate, oil and individual leasing sectors in Kuwait and other markets in the MENA region,” he added.

Investcorp’s $1bn Gulf Opportunity Fund invests in companies across the GCC and Turkey, as well as the wider MENA region. Its investment in Autodesk comes two months after it acquired a 30% stake in Orka Group, one of Turkey’s fastest growing retailers.

Other investments include Kuwait’s Gulf Cyro, Saudi L’azurde and Turkish Tiryaki Agro. Earlier this year the Gulf Opportunity Fund successfully exited from its first investment in the UAE, Redington Gulf.

Since its inception, the Bahrain owned firm has invested in 103 companies across North America, Europe and the MENA region, representing $33bn in value. These include luxury brands such as Gucci, Tiffany and Co and Saks Fifth Avenue.

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