GulfMerger, an independent financial advisory firm in the Middle East, has been retained by Hilal Cement Company as financial advisor to review its strategic growth alternatives.
Hilal Cement Company is aiming to transform itself into a leading diversified holding company in Kuwait with equity interests spanning a number of infrastructure-related sectors.
Hilal Cement Company is currently engaged in two distinct building materials businesses, namely the import and distribution of cement through a fully-owned cement division and the import and distribution of wood and steel products through a majority-owned subsidiary.
Yaqoub Al Sharhan, Chairman of Hilal Cement Company, said:
’As a well established building materials company in Kuwait, Hilal Cement Company is strongly positioned to expand into related sectors by principally acquiring equity interests of companies fitting criteria we are currently establishing for ourselves, not only in Kuwait but also across the region if attractive opportunities were to present themselves’.
As part of this strategy, Hilal Cement Company is also contemplating strategic alternatives in connection with its fully-owned cement division, which potentially could also include the sale of an equity interest to a value-added strategic investor. ’Our cement division has performed exceptionally well, as is, tripling operating earnings from KD1 million in 2005 to KD3 million in 2006. We expect to deliver significantly higher operating earnings in 2007 considering the continued strength in the cement sector in Kuwait. Should we decide to move forward with the sale of an interest in the cement division only, we expect this to take place with a strategic or financial investor which will help us add value to this business,’ added Yacoub Al Sharhan.
To assist with the transformation, Hilal Cement Company retained GulfMerger, a financial advisory firm, principally focused on mergers, acquisitions, and strategic partnerships in Kuwait and across the region.
Yann Pavie, Chief Executive Officer of GulfMerger, said ’Hilal Cement Company represents an attractive platform for growth considering its current business mix and the overall positive outlook on construction activity in the region. Being the smallest among current cement companies in Kuwait, the cement division currently features a number of organic and strategic partnerships opportunities for growth both in Kuwait and the GCC region, which certain value-added investors will be able to help unlock.’
Reflecting this transformation, Yacoub Al Sharhan stated: ’Consistent with our plans, we will change the name of the company to reflect its newly set vision and are in the process of establishing a new subsidiary to hold our cement business.’