Investment Banking

Within the backdrop of a particularly challenging global environment, SICO Investment Banking continues to maintain its leadership position in Bahrain

SICO Investment Banking is a well-established market leader in Bahrain with a presence in Saudi Arabia. The investment banking team’s unparalleled expertise in the Bahraini market and ability to deliver a comprehensive suite of tailored financial services for both large corporates and mid-sized players has made SICO the trusted partner of choice for both private and public sector clients.

Over the span of two decades, SICO has successfully executed complex deals and managed initial public and secondary offerings, M&A deals, and advisory services across a wide spectrum of sectors, including construction, tourism, real estate, telecoms, banking, insurance, consumer finance and education. From arranging primary and secondary issuances to deal structuring, valuations, and corporate and family business advisory services, SICO Investment Banking offers in-depth insights, textbook execution, and a flexible platform that provides innovative and fit-for-purpose solutions.

Leveraging its reputation as the go-to investment bank in Bahrain, SICO continued to target large players and publicly listed companies as its primary client segment in Bahrain, while in Saudi Arabia the investment banking team successfully negotiated and structured a number of mid-size transactions in defensive sectors such as healthcare, pharmaceuticals, and education.

The division’s landmark transaction for 2022 was the Kuwait Finance House (KFH) acquisition of Bahrain-based Ahli United Bank (AUB) in a USD 10.9 billion deal. SICO Investment Banking acted as Bahrain receiving agent, Bahrain execution advisor, and cross-listing advisor on the deal, which stands today as the third largest banking acquisition in GCC history that has created the region’s sixth largest bank and the second largest Islamic lender with USD 115 billion in assets. The transaction, which initially began in 2019 and halted for three years due to COVID, set new heights in the GCC M&A space. The offer received acceptances representing 97.273% of AUB’s shares, far exceeding expectations and surpassing KFH’s minimum condition of 90%. It was also the first major cross-border acquisition, the first Kuwait listed institution to cross-list in Bahrain, and the first use of the squeeze-out right. SICO’s mandate required significant synchronization with numerous stakeholders including the central clearing houses of both countries and regulators.

The Investment Banking team continued to deliver on an ongoing advisory mandate for Mumtalakat, Bahrain’s sovereign wealth fund and long-term partner of SICO. A phased transaction for the merger of Mumtalakat’s wholly owned subsidiary, General Poultry Company, and Delmon Poultry Company which began in 2020, continued for its third year with negotiations on the share swap agreement. The transaction is currently in its last phase.

In the real estate and hospitality sectors, SICO Investment Banking has been actively pursuing high-profile mid-size transactions. During the year, the division acted as an advisor for Bahrain Family Leisure Company B.S.C (BFLC) on a potential M&A deal with DGC Hospitality & Partners, the food and beverage investment arm of Dividend Gate Capital (DGC). It also advised Al Jazeera Tourism Company (AJTC) on the execution of a sale and purchase agreement for 100% of Novotel Al Dana Resort in Bahrain to Gulf Hotels Group.

Elzaad Sukuk Fund, a new sukuk fund established in partnership with Kuwait-based Wafra International Investment Company to invest in sharia-complaint fixed income securities in the GCC, was successfully registered in Bahrain in 2022. An official fund launch across the GCC is expected to kickstart early 2023. The Islamic fixed income, open-ended fund will also be registered in Saudi Arabia and Kuwait and has been seeded with USD 25 million. Once the fund launches it will be added to the portfolio of investments managed by SICO Asset Management and will leverage SICO’s on the ground presence in Saudi Arabia.

Since 2016, SICO has successfully carried out its role as the placement agent for Carlyle, one of the world’s largest asset management firms. In 2022, the division increased the number of funds that it represents on behalf of Carlyle to five funds in total in both private equity and real estate. SICO Investment Banking also acted as the sell-side agent for Bank ABC on their sale of a 2.5% stake in SICO for BD 1.9 million.

In line with SICO’s strategy to introduce Wealth Management into the product mix, Investment Banking is in the process of structuring and launching a first of its kind regional Employee Savings Scheme (ESS) with SICO itself as one of the underlying portfolios of the scheme. The innovative fund, set up as a trust registered in Jersey, will offer strong benefits to employees investing a quota of their salaries, with SICO matching the contribution. Its ring-fenced assets portfolio includes global low-cost exchange traded funds (ETFs) that will be managed by SICO. Globally, the ESS will be administered by Intertrust Group in the Netherlands, while AON compensation consultants from the UK have been appointed as advisors. Once it is up and running, the ESS will be marketed to other large companies listed in Bahrain as a product within SICO’s new wealth management practice.

SICO Capital completed advisory services on the sale of 75% of Saudi Innova Healthcare, a leading healthcare service provider in Saudi Arabia that runs a large number of polyclinics and pharmacies in addition to its distribution and warehousing operations. In the education sector, the division in Saudi Arabia successfully advised a prominent international school on the sale of a 30% stake to a private equity fund/strategic investor.