DUBAI (Reuters) - Affirma Capital, run by former Standard Chartered bankers, has hired JP Morgan (JPM.N) to advise on the sale of the private equity firm’s minority stake in a Jordanian agricultural and food processing company, two sources told Reuters.
Bidders for the stake in Al Jazeera Agriculture Company include ADQ, formerly known as Abu Dhabi Development Holding and based in the capital of the United Arab Emirates, the sources said, adding ADQ was being advised by Rothschild & Co (ROTH.PA).
The UAE, which depends on imports for 80%-90% of its food, introduced a law in March to organize strategic food stocks for emergencies, the state news agency WAM reported, amid growing food security concerns due to the coronavirus crisis.
Al Jazeera’s main products include fresh and frozen chicken for retail and wholesale, eggs, chicks and chicken feed, its website says.
The sources did not give a value for Al Jazeera but said it had earnings before interest, taxes, depreciation and amortization (EBITDA) of about $40 million a year.
Based on typical valuation multiples of 8 to 12 times EBITDA, the Jordanian firm could be worth in excess of $320 million. However, the coronavirus crisis has caused turmoil in financial markets, hammering corporate valuations.
The sources said the crisis had slowed the sale but bidders were still active.
The sources did not quantify the stake held by Affirma, which now has $3.6 billion of assets under management after it was carved out from Standard Chartered Private Equity.
Standard Chartered Private Equity bought what it described as a “significant minority stake” in Al Jazeera in 2014 for $35 million.
Affirma Capital did not respond to a Reuters request for comment. Rothschild and JP Morgan declined to comment. Al Jazeera and ADQ were not immediately available for comment.
ADQ controls several government companies, such as the Abu Dhabi Securities Exchange, and is led Mohamed Hassan AlSuwaidi, a former executive at Abu Dhabi state fund Mubadala Investment Company.
Reporting by Hadeel Al Sayegh; Editing by Edmund Blair