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Lumina reports continuing uptick in GCC private mergers and acquisitions activity in H1 2019

Report shows continuing uptick in EBITDA valuation multiples from 6.4x to 6.5x indicating increasing transaction activity at these levels

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Lumina Capital Advisers Limited (LUMINA), a specialist corporate finance advisory firm specializing in private company M&A throughout the GCC, today released its Q2 2019 Lumina Private Company Index (LPCI); the first private company M&A index covering the GCC. The quarterly report tracks private company average deal valuations across a broad range of sectors across the region.

In addition, Lumina’s latest ‘State of M&A’ survey which analysed mid-market M&A data from private companies, investment firms and advisors in the region indicate most active sectors as industrials, healthcare, and consumer with intra-GCC deals accounting for 63% of M&A activity and  90% of those deals involving either UAE or KSA.

George Traub, Managing Partner at Lumina commented, “Lumina’s report provides much needed, real time insights into the often opaque world of private company M&A in the GCC region. The vast majority of private company M&A in the region are sub $100million, and it is this segment that is least covered by analysts in the market. The LPCI aims to provide this transparency and a barometer of deal activity using Lumina’s proprietary transaction experience in this niche segment.”

“According to respondents to our ‘State of M&A’ survey, the main reasons driving private company M&A are succession planning (46%), access to capital (34%) and diversification of markets (38%). Saudi Arabia is expected to lead the volume of transactions during the remainder of the 2019, based on elevated levels of deals preparations we are seeing from clients, fuelled by government led infrastructure and social reforms.”

Lumina’s report also indicates subdued private equity activity with little to no capital raising activity at fund level in the post Abraaj era. However, secondaries transactions continue to pique international private equity interest, both at a fund and portfolio level, which are expected to drive most of the private equity action in the region.

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