Citadel Capital Acquires Nucleus of 18th Platform Investment

A leading Egyptian solid waste management company will become the nucleus of a new Platform Company in the highly promising solid waste management sector in the Middle East and Africa region

Citadel Capital, the leading private equity firm in the MENA region, announced today that it has acquired a controlling stake in two leading firms in the solid waste management sector.

The Egyptian Company for Solid Waste Recycling (ECARU) and the Engineering Tasks Group (ENTAG) are managed as one firm and will be grouped under a single holding company that will serve as the core of Citadel Capital’s platform investment in the solid waste management sector.
The new company, ENTAG Holding, will be Citadel Capital’s 18th Platform Company.

“We are absolutely delighted to announce the creation of our 18th platform investment, which will be controlled through the ECO-LOGIC Opportunity-Specific Fund,” said Marwan Elaraby, Managing Director of Citadel Capital. “The solid waste management sector is under-developed across the region, with a limited number of large companies operating and much of the waste not being properly treated. There is ample room for geographic expansion and vertical integration, including expansion into waste-based industries.”

Established in 1997, ECARU has contracts to collect and process more than 500,000 tons per year of agricultural solid waste, particularly rice straw. Although the company presently focuses on the conversion of rice straw into compost, it has pioneered a technology to produce animal fodder and is also investigating the feasibility of producing medium-density fiber board, fuel pellets and paper from rice straw.

ECARU also specializes in municipal and agricultural solid waste management. The company’s operations in the South of Cairo are executing a contract to process up to 1,500 tons of municipal waste per day, produce compost and extract recyclable materials. Its operations also include a landfill built to the highest international standards in the 15th of May City. At this stage, the company is focused on the sorting and composting of municipal solid waste with plans to expand into waste collection in the future.

“ECARU is also on the cutting edge of carbon credits trading,” notes Citadel Capital Principal Karim Ragab, explaining that the company became one of the first Egyptian organizations to sign a greenhouse gas emission reduction purchase agreement with the World Bank in the summer of 2008, agreeing to sell 325,480 tons of carbon dioxide equivalent greenhouse gas emission reductions to the Carbon Fund for Europe.

Only a handful of similar UN-backed clean development mechanism (CDM) projects have been signed in Egypt to date.

ECARU’s sister-company ENTAG, established in 1995, specializes in the design, manufacturing and erection of solid waste management systems. Equipment supplied is partly procured from the world’s leading waste management equipment producers and partly designed and manufactured locally in Egypt.

“The companies are regional leaders in their field,” notes Ragab. “They have substantial operations in Egypt as well as international experience that include work in Malaysia, Sudan and Libya. The two companies are an excellent fit with Citadel Capital’s strategy of turning national leaders into regional players.”

Citadel Capital intends to continue to grow the ECARU and ENTAG businesses as a majority shareholder alongside the existing shareholders and management team through a series of cash injections in 2009 and 2010.

“This partnership with Citadel Capital is great news for ECARU and ENTAG and their staff,” says Co-Founder and Managing Director Dr. Hisham Sherif, who is a professor of chemical engineering at Minya University.

Dr. Ahmed Gaber, also Co-Founder, Chairman of the Board and a professor of chemical engineering at Cairo University, adds, “Together, we will build a strong platform for solid-waste management in the MENA region, integrating the entire value chain from plant design and construction through to the final recycled products.”

The two companies employ more than 1,500 staff members, with head count fluctuating seasonally.

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Citadel Capital is the leading private equity firm focusing on building regional platform investments throughout the Middle East and Africa in selected industries through acquisitions, turnarounds, and greenfields executed via Opportunity Specific Funds. Citadel Capital’s 17 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 industries, including mining, cement, transportation, food and energy. Since 2004, the firm has returned more than US$ 2.4 billion in cash to investors, more than any other private equity firm in the region. Citadel Capital is the largest private equity firm in Africa by PE assets under management (2004-2009, as ranked by Private Equity International). For more information, visit www.citadelcapital.com.

For more information, please contact:

Ms. Ghada Hammouda
Head of Corporate Communications,
Citadel Capital (S.A.E.)

g...@qalaaholdings.com (click to reveal this email)

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