DUBAI Stanford Marine Group, part of emerging markets-focused private equity firm Abraaj Group, has hired banks to help arrange a stock market listing in London, as regional private equity firms tap overseas stock markets to exit investments.
Deutsche Bank (DBKGn.DE) and Goldman Sachs Inc (GS.N) have been picked to arrange the listing of the oil and gas services firm, scheduled for the first quarter of 2014, three banking sources said on Wednesday, speaking on condition of anonymity as the matter has not been made public.
Abraaj, whose investment portfolio spans the Middle East, Africa and Asia, owns 51 percent of Stanford Marine, with the remaining stake held by Abu Dhabi-based investment firm Waha Capital WAHA.AD.
Stanford Marine, Abraaj, Waha Capital, Goldman Sachs and Deutsche Bank declined to comment. The sources did not disclose how much the company aimed to raise from the offering.
Private equity firms in the region are looking to exit their investments due to pressure from shareholders for returns and as financial markets recover from the twin blows of Arab Spring uprisings and the global financial crisis.
There is a backlog of private equity investments waiting for an "exit" - which usually means being sold or listed. Some 218 investments were made by these regional funds from 2004 to 2009, out of which only 14 have reached exit, according to a report from the Wharton School of the University of Pennsylvania and Saudi-based PE firm Amwal AlKhaleej in 2011.
However, private equity investors are staying away from local stock offerings and instead prefer established markets, such as London, for share offerings.
"If you have a good story to tell and want international investors to look at you seriously, London is undoubtedly the number one choice for regional companies," said one senior Dubai-based banking source.
Gulf Capital, an Abu Dhabi-based private equity firm, has named Rothschild as a financial advisor for a share offering of its majority-owned Gulf Marine Services unit in London, Gulf Capital's chief executive has said.
Healthcare provider Al Noor Hospitals ANHA.L, part-owned by private equity firm Ithmar Capital, listed in London in June and was valued at $1 billion, while Dubai-based developer DAMAC Properties is also said to be seeking a London IPO.
The banking source added that local markets needed more depth and to change some opaque regulations before they could attract such international companies.
Set up in 1997, Stanford Marine owns, manages and operates offshore supply vessels that service the oil and gas industry in the Middle East, South East Asia, Africa and the Gulf of Mexico.
The company recorded $241 million in revenues last year, while earnings before interest, tax, depreciation and amortization (EBITDA), a key industry figure, stood at $62.1 million, according to the firm's website.
It raised a $300 million loan last month to refinance existing debt, with local and regional banks taking part.
(Additional reporting by Stanley Carvalho; Editing by Jane Merriman)