Dubai Buyout Firm Abraaj Plans Further Turkey Deal Next Year

Abraaj Capital Ltd., the Dubai-based buyout firm that acquired Turkish dairy maker Yorsan Gida Mamulleri AS, said it plans at least one further investment in the country next year.

The firm, with five exits since its first Turkish investment in 2007, is in talks with companies including in the food and education industries, Selcuk Yorgancioglu, Abraaj’s regional head for Central Asia and Turkey, said in an interview on Dec. 17.

Abraaj, which has $7.5 billion in global assets under management, bought 80 percent of Yorsan for an undisclosed price this month. Private-equity investors including The Carlyle Group LP, BC Partners Ltd. and KKR & Co. LP are seeking to benefit from annual average economic growth that’s exceeded five percent in Turkey during Prime Minister Recep Tayyip Erdogan’s decade-long rule.

“We will have an active year in 2014,” Yorgancioglu said in Istanbul. “We want to have at least one opportunity turned into reality next year.”

More Expensive

“Assets in Turkey are more expensive than those in other countries,” Yorgancioglu said. Even so, the country’s economic growth, projected by the government at four percent in 2014 and five percent in 2015 and 2016, and a young population make it “an attractive market,” he said.

A price comparison calculated by dividing a company’s earnings before interest, tax, depreciation and amortization to the sum of the value and debt, is 8.7 in deals this year in Turkey, compared with 6.9 in Eastern Europe, according to data compiled by Bloomberg.

The ratio of private-equity investments to gross domestic product in Turkey is 0.05 percent, compared with 0.15 percent in the group of Brazil, Russia, India and China and one percent in the U.S., Yorgancioglu said.

“So investment potential for private equity is huge in Turkey,” he said. “We like the assets from the industries which have consumers in their direct focus.”

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