Bahrain- and London-listed investment company Investcorp said on Thursday was leading a consortium to acquire a 70 percent stake in Saudi gold and jewelry maker L'azurde which has its headquarters in Riyadh for an undisclosed sum. The acquisition is based on an enterprise value of more than $300 million. An enterprise value is a valuation measure that includes a company's debt. The acquisition is one of the first major private equity deals this year in the Gulf Arab region, in which investors have been holding on to their funds since the global financial crisis reached the region late last year. L'azurde, owned by the Al Othaim Holding Co, had 2008 revenues of more than $500 million, Investcorp said in a statement. The company has two manufacturing facilities for gold and jewelry in Saudi Arabia and Egypt and distributes its products mainly on the Middle Eastern wholesale market. Investcorp made the investment through its $1.1 billion Gulf Opportunity Fund I, the fund's second deal after acquiring a 36 percent stake in the Middle Eastern operations of IT distributor Redington India Ltd in November for $98 million. Its partners in the deal are Eastgate Capital Group, private equity arm of Saudi bank NCB, and Abu Dhabi-based banking group The National Investor. L'azurde was founded by Abdul Aziz Al Othaim. Over some three decades, it has developed into a market-leading business with a well-known brand, high quality product and design, strong manufacturing and distribution capabilities, and economies of scale advantages. Today, it is the Arab world's leading designer, manufacturer and distributor of gold jewellery for the mass market, and the fourth largest such company globally. According to a recent Forbes Arabia study, L'azurde is one of the best known brands in the Arab world. L'azurde has state of the art manufacturing facilities in Riyadh and Cairo employing over 2000 people, and sells throughout the Middle East through 4,200 wholesale accounts, including to secondary markets through its distribution capabilities in the UAE. In addition, it has 18 flagship retail stores across the region. L'azurde had 2008 revenues of more than $500 million and grew Ebitda by 14 percent over the previous year, making it over four times the size of its nearest competitor. In the past two years L'azurde has undertaken, in conjunction with the World Gold Council, one of the most extensive advertising campaigns ever seen in the region featuring Elissa, one of the best-known female singers in the Arab world, as its public face. MENA is one of the largest and fastest growing jewelry markets - 12 percent of world consumption and 14 percent CAGR in value - and growth is expected to continue, largely driven by cultural factors. Gold is seen as a means of storing wealth, especially as part of dowries. Currently, approximately 50 percent of the regional population is under 20 years old and some 50 percent of gold consumption is wedding-related, providing strong underpinning for future demand. Gold is also an important fashion item in the region. L'azurde takes no risk on gold price volatility, as it has implemented a gold price pass
