DIC picks up Almatis, UBS underwrites $1bn

Dubai International Capital, the Middle Eastern investment firm, has bought Almatis in a secondary deal, with loans at more than six times EBITDA provided by Swiss bank UBS.

Investment firm Dubai International Capital has bought Almatis from the Canadian firm Teachers’ Private Capital and European buyout firm Rhône Capital. Terms were undisclosed, but the bid had $1 billion (€691 million) of debt at more than six times debt to EBITDA multiples, according to someone close to the deal.

The liquidity problems in the global credit markets have forced banks to cut back on debt to EBITDA multiples. The deal is the largest single underwritten deal in Europe since the credit crunch as 100 percent of the capital was provided by Swiss bank UBS. The trend in the present marketplace is to jointly underwrite deals of this scale.

The source said: “The debt is priced to sell. You definitely need a good credit like Almatis with some following and a name like DIC for a bank to sell this much debt in present conditions.”

The deal is also the largest secondary in Europe since the credit crunch.

Almatis researches, develops and produces alumina (aluminum oxide) materials for manufacturing companies. This product is used mainly in steel refractories as well as ceramics and flame retardants. The company has global presence in countries including Germany, China, the United States and India, and it employs more than 900 people.

The company’s EBITDA was undisclosed.

DIC said in a statement it is looking to expand Almatis’ presence in China, Russia, India, Brazil and the Middle East. This will fulfill its aim of increasing global capacity by almost 20 percent to around 750,000 tons by 2010.

Global production of steel is expected to grow at a compound annual growth rate (CAGR) of 5 percent from 2006 to 2012 and most of the growth is anticipated to come from the Middle East and Asia, DIC said. China alone is forecast to grow at a CAGR of at least 10 percent.

Earlier this week, DIC bought a 9.9 percent stake in Och-Ziff for $1.18 billion as the US hedge fund manager approaches an initial public offering.

The investment firm’s backer Dubai Holding through subsidiary Dubai Financial yesterday also increased its stake in Greek-listed investment firm Marfin Investment Group and in Marfin Popular Bank to 16 percent and 19.9 percent respectively for €612.1 million ($882.3 million).

Dubai Holding is wholly owned by the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum. Dubai Holding contrasts its status with the Istithmar investment company, which is funded by the Dubai government. DIC also invests on behalf of high net worth clients.