Eastgate Capital Group (Eastgate), the private equity fund management arm of NCB Capital of Saudi Arabia, announced Saturday that it has invested $40 million in exchange for an influential minority stake in Sigma Pharmaceutical Industries, SAE (Sigma), a generic pharmaceutical company based in Egypt. The investment is in the form of a capital increase to enable Sigma to expand into other attractive regional markets, including Saudi Arabia, Algeria, and Sudan. This transaction represents the second investment of Eastgate MENA Direct Equity L.P. fund and the first in the healthcare sector, a key target sector for the Fund. Within the healthcare sector, the generic pharmaceutical industry demonstrates attractive growth and profitability, while maintaining a defensive and resilient profile that is relatively more immune to economic cycles. Egypt represents one of the largest and fastest growing pharmaceutical markets in the MENA region, growing in value on average at approximately 15% per annum over the last eight years. Egypt's pharmaceutical industry is over 60 years old and is considered a strategic industry for the country. Established in 1998, Sigma is currently ranked 10th in the Egyptian pharmaceutical market in terms of sales and is one of the fastest growing and most profitable pharmaceutical companies in Egypt. In 2008, Sigma had revenues of over EGP340 million, representing 44% growth over the previous year. The Company's existing product portfolio and pipeline are quite broad, relatively young, well-matched to Egypt's therapeutic needs, and should sustain the Company's growth going forward. In 2008, Sigma launched its state-of-the-art manufacturing facility, Sigmatec, one of the largest and most advanced sterile manufacturing facilities in Egypt. The new facility will provide the Company with ample capacity for future growth and enable Sigma to enter into new attractive market segments. Eastgate will work with Sigma management and stakeholders to support the growth and regional expansion plans of the Company, help institutionalize the business, and assist in building a strong foundation for a regional profile. Dr. Ghazi Al-Rawi, a Founder and Managing Partner of Eastgate Capital Group, said: “Based on our internal analysis and research, we have developed strong interest in the regional healthcare sector and the generic pharmaceutical industry in particular, which not only offers attractive upside but also resilience to economic down turns.
