TPG and Abraaj compete against KKR & Co for Saudi food chain

By VCPOST Staff Reporter

Nov 11, 2013 12:14 PM EST

Private equity firms TPG Capital and Abraaj Group had agreed to form a partnership in order to compete against American investment firm KKR & Co. TPG and Abraaj intended to acquire a majority stake in fast-food chain Kudu, Reuters sources said.

Kudu operates over 200 branches in Saudi Arabia. The company was established in 1988 and owned by four individual shareholders. The Riyadh-based restaurant chain is currently worth around SAR 2 billion (USD533.3 million) based on a valuation of about 20 times its earnings. Kudu was expected to gain a net income of around SAR 100 million (USD26.7 million) this year, according to Reuters's report.

In June, Reuters reported that a majority stake in the fast-food chain has been put up for sale. Private equity firms TPG Capital, Abraaj Group and KKR & Co. were among the 40 potential bidders contacted for the deal.

Abraaj Group is the largest private equity firm in the Middle East. Meanwhile, a stake purchase by US-based TPG and KKR & Co. would be their first investment in the Middle East, Reuters said.

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