Arqaam Capital

Arqaam Capital Announces Closing of the Sale of a Significant Minority Stake in Orchidia Pharmaceutical Industries

Tuesday, December 5, 2017

Arqaam Capital, the specialist emerging and frontier investment bank, announced today that it has acted as the exclusive sell-side advisor to SPE Capital ("SPE"), formerly Swicorp Private Equity, Orchidia Pharmaceutical Industries ("Orchidia"), and Dr. Ossama Abbas, the founder, majority shareholder and Chairman of Orchidia, with respect to the sale of a significant minority stake to the Egyptian American Enterprise Fund ("EAEF"). Orchidia is a leading Egyptian ophthalmic generic medicine manufacturer and one of the fastest growing pharmaceutical companies in Egypt.

The transaction, which closed today following satisfaction of customary closing conditions, consists of a capital increase that will be subscribed to by EAEF and Dr. Ossama Abbass, in addition to EAEF acquiring the stakes owned by SPE Capital and other minority shareholders. The proceeds of the capital increase will be used to enhance the capital base of the Company and finance its expansion plans.

Amr Sultan, Executive Director at Arqaam Capital commented: "We are delighted to have worked alongside the shareholders of Orchidia in closing this transaction and to have helped SPE achieve impressive returns of three times the amount invested in 2013 in USD terms. This transaction marks yet another milestone in solidifying Arqaam Capital's presence in Egypt and further demonstrates the firm's M&A capabilities."

Dr. Ossama Abbas commented: "The previous couple of years have been really challenging for the pharmaceutical industry in Egypt. However, the Orchidia team was able to capitalize on this opportunity by consistently working hard and focusing on delivering high quality affordable medicine to the market in addition to opening up key export markets. We are proud of our achievements and are looking forward to our next phase of growth in the local and export markets with the support of our new partners."

David Rey, Managing Director at Swicorp said: "When we invested in Orchidia back in January 2013, Egypt was just emerging from its revolution, with all the uncertainties that this entailed. Not many investors were around at that time. We've selectively chosen the pharma sector for its defensive nature, designed a structure to mitigate risks when possible, and partnered with a businessman culturing the highest standards of ethics, skills and leadership. We've seen a lot since then: a regime change, regulatory adjustments, a major devaluation and significant pricing changes across the industry. The company navigated steadily through all these challenges and I like to think that the strength and quality of our partnership was key in supporting the company and its management to successfully do so."

Commenting on the exit, Mehdi Charfi, Partner at SPE said: "We are proud to leave the company in a totally different place from the time we invested in it: strengthened brand and image, significantly higher market share, a fast-growing export business and stronger governance. This is a testament to the resilience and attractiveness of the Egyptian market where we see number of attractive opportunities and where we continue to actively prospect."

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