Investcorp buys stake in Saudi oil and gas company

Investcorp has acquired a significant stake in Al Yusr Industrial Contracting Company, the latest in a flurry of deals targeting Gulf heavy industry.

Investcorp has acquired a significant stake in Al Yusr Industrial Contracting Company (AYTB), the latest in a flurry of deals targeting Gulf heavy industry.

The Bahraini private equity firm has taken a 38 per cent stake in Al Yusr, a Jubail-based provider of technical services in the oil and gas sector in Saudi Arabia and Qatar.

Investcorp, which once held stakes in Gucci and Tiffany's and listed them on the New York Stock Exchange, has exited a number of investments in less glamorous industries this year, including software providers for managing car insurance and one of the biggest distributors of parts for heavy lorries in the United States.

"Saudi Arabia is currently experiencing a boom in industrial growth and as a trusted, well-established partner of choice to its many clients, we believe AYTB has excellent growth prospects," said Mohammed Al Shroogi, the president of Investcorp's Gulf activities.

Financial terms of the deal were not disclosed. The latest acquisition follows an investment this year in Hydrasun, a supplier of fluid control equipment in the offshore oil and gas sector.

In 2007, Investcorp acquired Moody International, a British company that provides inspection services and international certification for pipes and pumps, which was sold to Intertek,the testing group, four years later.

It is the latest in a series of investments in the eastern provinces of Saudi Arabia.

Sadara, a joint venture between Saudi Aramco and Dow Chemical, said it had sealed a $10.5bn financing deal for a massive petrochemicals project in Jubail earlier this week.

Mergers and acquisitions (M&A) in the Middle East abruptly stalled in the past few months following an exceptionally strong first quarter, according to data from Thomson Reuters.

Deals in the region totalled $6.5bn between the start of the year and the end of May, a decrease of 14 per cent compared with the corresponding period a year earlier.

Globally, energy and power sector M&A fell to a four-year low during the same period.