Alternative investments firm adds Energia Model Trading & Contracting to portfolio of $160m NBK Capital Partners Mezzanine Fund II
Represents third sharia-compliant financing across two funds in KSA
NBK Capital Partners – an alternative investments firm that advises on providing flexible growth capital to mid-sized companies in the Middle East, North Africa and Turkey – has completed an investment in Energia Model Trading & Contracting LLC, a leading energy rental business in Saudi Arabia.
The sharia-compliant mezzanine investment will enable the company – one of the largest providers of temporary power solutions in Saudi Arabia, with 500 generators and total capacity of 250MW – to expand and take advantage of the increased construction activity and infrastructure spending stimulated by Saudi Vision 2030. The firm’s diverse equipment base and engineering capabilities enables it to serve short and long-term projects to repeat customers across various industries, including oil and gas, utilities, industrials and infrastructure. The mezzanine financing will facilitate the buy-out of Al Faris Equipment Rental’s energy rental business, including the acquisition of a fleet of power generators previously leased by the Jubail-based Energia Model Trading & Contracting LLC in the Kingdom.
Yaser Moustafa, Senior Managing Director at NBK Capital Partners, said: “We are committed to delivering superior returns for investors and this growth capital is consistent with our goal of investing in sectors that benefit from secular trends, in Energia’s case the domestic electricity supply and demand imbalance in the Kingdom. Energia has earned a strong reputation among its target market thanks to its long-standing partnership with Al Faris and excellent service standards.”
NBK Capital Partners is a pioneer in mezzanine investing, having advised the region’s first fund launched in 2009, the recently closed NBK Capital Mezzanine Fund I. The Energia deal marks the third investment of the US$160 million NBK Capital Partners Mezzanine Fund II, which was raised in 2017, following deals with Qimam El Hayat, a private international K-12 school in Riyadh, and Perkon, Turkey’s market leader in electronic payment systems.
“Our focus on providing flexible capital to profitable firms in market-leading positions with strong management teams has to date delivered outstanding results,” added Mr. Moustafa. “NBK Capital Mezzanine Fund I, which – with eight successful exits and a 17% gross Internal Rate of Return (IRR) – was among the world’s top performing mezzanine funds and our goal is to achieve similar returns for investors through the Mezzanine Fund II.”
NBK Capital Partners, headquartered at Dubai International Financial Centre, has a strong track record in the Kingdom to date, having led seven investments – including three through mezzanine vehicles, and the firm continues to see attractive opportunities in the country. Energia Model Trading & Contracting LLC represents the second investment in the regional utilities and energy sector for NBK Capital Partners Mezzanine Fund II.
NBK Capital Partners enables growth through flexible solutions spanning private equity, mezzanine and real estate. It has advised on investments of over US$1billion and has a track record of 17 realizations from 29 investments, the highest number of profitable exits by an alternative investments firm in the region over the past decade.