EFG-Hermes Holding SAE, the Egyptian investment bank, is near to being hired with Goldman Sachs Group Inc. (GS) to manage the initial public offering of Edita Food Industries, three people with knowledge of the matter said.
The Cairo-based company, whose products include the Twinkies cake in Egypt, is expected to hand out formal mandates to the investment banks shortly, the people said, asking not to be identified as the information is private. The IPO may be valued at about $300 million, according to the people.
Investment banking activity in Egypt is reviving amid improving markets and renewed political stability after the nation elected former army chief Abdel-Fattah El-Sisi as president. The benchmark EGX 30 Index has surged 67 percent since the military toppled an elected Islamist government last year, a move that attracted at least $15 billion of aid pledges from Saudi Arabia, the United Arab Emirates and Kuwait.
“The stock market’s rebound in prices and volumes is making it a much more attractive tool to raise funds, which bodes well for investment banks,” Ahmed Hindawy, acting head of research at Cairo-based Prime Securities, said today by phone. “Companies are seeing more opportunity for economic recovery than any other time in the last three years, especially with expectations of more financial help from the Gulf.”
Amoun Pharmaceutical Co., one of the largest drugmakers in Egypt, hired Jefferies Group LLC to explore a potential sale, Bloomberg News reported last month. Arabian Cement raised $110 million from an IPO in May, the country’s first since the 2011 uprisings. The same month New York-based Ripplewood Advisors bought a stake in luxury housing developer Six of October Development & Investment, while London-based Actis LLP said it intends to make two acquisitions in Egypt’s consumer and health-care industries.
Bloomberg News reported June 17 that Goldman Sachs is close to being hired on the IPO, according to three people with knowledge of the matter, who asked not to be identified as the information is private.
Edita is the largest independent snack food business in North Africa, Actis said in June 2013 when it bought a $102 million stake in the company. EFG-Hermes and Goldman Sachs declined to comment, while officials at Edita couldn’t immediately comment.
EFG-Hermes advanced 0.1 percent to 15.37 pounds at the close in Cairo and has more than doubled since the military’s takeover of power last July.