Abraaj nets 75% IRR on internet portal sale

The Middle East, North Africa and South Asia specialist has sold its 2005 investment in fast-growing Maktoob.com to a hedge fund.

Abraaj Capital, a private equity firm specialising in investment in the Middle East, North Africa and South Asia region, has sold its stake in Maktoob.com, an internet portal, to hedge fund Tiger Global Management.

The sale generated an internal rate of return in excess of 75 percent. Abraaj bought stake in 2005 using capital from its buyout fund.

Founded in 2000 and headquartered in Amman, Jordan, Maktoob provides a variety of online services to millions of users, including the most-visited Arabic-language auction site, Souq.com; Arabic-language search engine Araby.com; the largest Arabic matrimonial website, Bentelhalal.com; and Arabic and English web-based email and chat rooms.

Maktoob.com was recently ranked as the 102nd most visited site on the internet globally, the most visited Arabic site in the Arab World and among the top 10 most visited global sites in each of the six GCC states.

Arif Naqvi, vice chairman and chief executive officer of Abraaj Capital, said: “Led by a pair of bright, ambitious young men and operating in a high growth environment with significant market potential, Maktoob was a very attractive acquisition candidate in 2005. Over the past 35 months, the company has realised the promise of growth, significantly expanding its web-based offerings, revenues and gross profits.”

The Maktoob exit follows the sales of ONIC Holding with an 84 percent IRR, Aramex’s 68 percent IRR exit and Amwal which recorded a 101 percent IRR.

Naqvi said he expected to have divested almost all of the buyout funds remaining portfolio by 2008, making it a six-year cycle of completion at “very profitable terms to all our investors.”