Abraaj makes first investment from Pakistan buyout fund

Dubai-based Abraaj Capital has acquired a controlling stake in a Pakistani forging house that specializes in steel components for the automotive industry. The deal is a first for Abraaj BMA Pakistan Buyout Fund, a $300 million investment vehicle.

Abraaj Capital, a Dubai-based private equity firm, has acquired a 80 percent stake in MS Forgings, Pakistan’s largest steel forging house that supplies steel components for automotive industry domestically and internationally, for an undisclosed amount.

It is the firm’s first investment from its $300 million Abraaj BMA Pakistan Buyout Fund, launched by Abraaj with Pakistani manager BMA Capital, also a portfolio company of Abraaj.

Founded in 1974, MS Forgings supplies steel forged components for the growing domestic automotive industry. Over the past five years, the market for locally assembled vehicles has growing at over 30% per annum, and analysts expect current growth levels to continue, according to a statement.

MS Forgings is considering strategic acquisitions within Pakistan as well as in established markets such as Europe and the US.

Tom Speechly, executive director at Abraaj Capital said: “One of the key mandates of our fund is to create globally competitive businesses through the numerous consolidation opportunities available in fragmented industries in Pakistan.”