NBK Capital announced today that its NBK Capital Mezzanine Fund I (the “Fund”) has completed its second transaction in Turkey by providing a USD 15 million mezzanine loan to Aras Kargo Yurtiçi Yurtdışı Taşımacılık A.Ş. (Aras), Turkey’s second-largest courier express and parcel provider.
Aras controls roughly 35% of the market and possesses a nationwide network comprised of 27 hubs, 20 district offices and 750 stores, handles over 200,000 shipments per day and employs 7,500 people. Aras’s main line of business is the domestic delivery of parcels and documents within 24 to 48 hours. The company and its main competitor dominate the sector with 75% combined market share, representing a duopoly position. The loan will allow Aras to address various working capital needs and allow its management team to focus completely on implementing its growth and profitability strategy.
Aras has recently brought in a new management team which in a short amount of time demonstrated considerable improvements in the company’s performance across all measures, including quality, sales, and profitability, even in a tough economic context. Revenues for the first-half of 2009 were 7.8% higher than the same period of the previous year, all the sales of Aras’s main competitor, and the Turkish economy as a whole, have contracted.
Amjad Ahmad, Senior Managing Director of Alternative Investments at NBK Capital, said, “The Turkish market is a very attractive market for us, and the CEP sector in particular is a service business with strong growth fundamentals in which growth tends to strongly outperform the rate of overall economic growth.” Walid Cherif, Senior Director, Alternative Investments – Mezzanine, also added, “the proven track record of the company’s management, the dominant market share, and the company’s established brand and market presence combined to create the perfect investment for our fund.”
NBK Capital Mezzanine Fund I is a MENA and Turkey focused mezzanine debt fund established in 2008. The Fund is managed by NBK Capital and GSC Group to make mezzanine investments in a variety of transactions including leveraged buyouts, refinancing, recapitalizations and growth financing. The Fund provides mezzanine financing for private equity-backed transactions as well as to mid-market companies.
