M&A firms advise Gulf Capital on 'highly profitable' AmCan exit

09 January 2024 Consultancy-me.com 2 min. read

Gulf Capital has exited its stake in AmCan, the Middle East’s largest distributor of sports nutrition products for an unknown but “highly profitable” stake. Three M&A firms advised the homegrown private equity firm through its exit.

The Abu Dhabi-based investor came on board at AmCan in 2016, with the aim to help the sports company scale its business. That objective has beyond doubt been achieved: over the past eight years, AmCan has grown to the largest player in its segment, and seen its revenues and gross margin swell by over 50%.

Growth was driven by the expansion of exclusive distribution partnerships and the addition of new outlets (now stretching 3,000 points of sale across MENA). Meanwhile, the company also strengthened its operating model with optimised working capital and enhanced trading terms.

M&A firms advise Gulf Capital on 'highly profitable' AmCan exit

Sports nutrition products in the distribution centre of AmCan

In its growth, AmCan was lifted by a booming market. According to data sourced from analyst firm Research and Markets, the sports nutrition market in the region nearly doubled in the 2016-today period. A number of trends including increasing demographics, high disposable income, growing health awareness among consumers, and technological advancement in sports nutrition production, have all payed a role in driving the market’s growth.

For the coming years, similar steep growth is expected, both globally and in the region.

“Our investment in Amcan was underpinned by the secular trends and shifts in consumer behaviour that continue to fuel the growth of the health and wellness sector across the Middle East. The disciplined execution of our value creation plan by AmCan’s management team and Gulf Capital’s operating partners have allowed AmCan to cement and expand its market leading position in the region,” said Karim El Solh, CEO of Gulf Capital.

In line with private equity averages (investments are typically exited between 5-8 years), AmCan has now exited its stake, bagging a lucrative return on investment in the process. Not disclosing the meaty details, El Solh did admit that “we are very proud of the strong returns we have delivered to our fund investors.”

Equally proud are the M&A advisors that helped Gulf Capital deliver its transaction. Gulf Capital was advised by Global Gate Capital, PwC and Eversheds Sutherland.

The new owner of AmCan, an undisclosed company described as a “regional FMCG distributor operating across the Middle East and Africa”, has acquired a 100% stake in AmCan. “Under its new owner, we believe AmCan will find the financial support, operational expertise, and depth of network that will take the company to new heights. We wish them all the best on their next chapter of growth,” said El Solh.

With over $2.4 billion in assets under management, Gulf Capital is one of the region’s largest financial investors. The firm’s focus is on six verticals: technology, fintech, healthcare, business services, consumer goods, and sustainability.