Qalaa Holdings and CPC Holding mark completion of Sphinx Glass transaction
Construction Products Holding Company (CPC) and Qalaa Holdings marked today the completion of their c. EGP 1.3 billion (US$ 180 million) transaction on Sphinx Glass.
The celebration marked the final conclusion of a transaction through which Saudi Arabia’s CPC (through its subsidiary CPC International) acquired leading Egyptian float glass manufacturer Sphinx Glass for an equity value EGP 816 million (US$ 114.2 million) for 100% of the shares of Sphinx, noting that the total enterprise value is c. EGP 1.3 billion (US$ 180 million); the difference is due to the deduction of debt and liabilities to be assumed by CPC.
“Qalaa Holdings has developed a state-of-the-art plant that serves domestic and international markets,” said Saleh Binladen, Chairman of CPC, Saudi Arabia’s largest manufacturer of building materials. “Sphinx Glass is one of the most technologically advanced float glass producers in Egypt and is managed by a highly professional team. It is a perfect complement to our existing portfolio of building materials manufacturing facilities and an important step in our expansion drive in Egypt and the region.”
“We are quite pleased to have successfully concluded the acquisition of Sphinx Glass. This key acquisition comes at a time when CPC is expanding into the very promising African market and I am confident that this acquisition will position CPC as one of the major players in the glass and aluminum sectors in the region,” said Eng. Mu’taz Sawwaf, Vice Chairman and Non-Executive Member of the Board of Directors. “We are planning to increase productivity, both in terms of product range and capacity, by making further investments focused on technology, research and development.”
“We have entrusted a gem in the manufacturing sector to a strong new corporate parent,” said Ahmed Heikal, Chairman and Founder of Qalaa Holdings (CCAP.CA on the Egyptian Exchange, formerly Citadel Capital), an African leader in infrastructure and industry. “We wish CPC every success with Sphinx Glass. I also hope the next phase of expansion of Sphinx Glass under its new owners will include glass for the production of solar panels. It is something the country needs.”
Added Qalaa Holdings Co-Founder and Managing Director Hisham El-Khazindar: “With the closure of this transaction, we have just marked the most significant exit to-date under our transformation program. We are confident that the strong management team and staff of Sphinx Glass will continue to capitalize on some of the very same macroeconomic fundamentals – including growing demand for infrastructure in an increasingly urbanized continent. These are among the factors that underpin many of our core investments. It has been an honor, personally and professionally, to help shepherd Sphinx Glass from an idea on the drawing board prior to the start of the global recession through to today’s sale. In the process, we have built an outstanding Egyptian company that has earned its market position at home and abroad.”
Qalaa held a 73.3% stake in Sphinx Glass, with the result being cash proceeds of around EGP 508 million (US$ 73 million) to Qalaa after the estimated capital gains tax.
From proceeds of the transaction, Qalaa Holdings and its co-investors will distribute a significant one-time exit bonus to employees of Sphinx Glass, from line staff to senior management.
Qalaa Holdings was advised on the transaction by Arab Legal Consultants acting as the Seller’s Legal Counsel and Pharos Investment Banking SAE acting as the Sell Side Advisor. CPC was advised by Helmy, Hamza & Partners and Crédit Suisse.
Sphinx Glass is a 200,000-ton-per-annum, state-of-the-art float glass production facility that began full operations in April 2010 and is today one of the largest independently operated float glass producers in the MENA region. In addition to being a key player in the Egyptian market, Sphinx Glass is also a significant regional and international exporter.
The company specializes in the production of clear and tinted float glass and coated glass in varying thicknesses.