Levant Capital, CVCI acquire Saudi chain Al-Raya

Investment funds advised by Levant Capital Limited (Levant Capital) and Citi Venture Capital International (CVCI) have jointly acquired a controlling stake in Al-Raya For Foodstuff Company Limited (Al-Raya), a leading supermarket chain in Saudi Arabia, the companies said in a statement.

The transaction is valued at $100 million and is seen as an opportunity for Levant Capital and CVCI to capitalise on the growth in consumer-driven demand and the increasingly attractive middle income segment of the kingdom. The transaction closed on February 21, 2012.

Based in Jeddah, Al-Raya operates a fast-growing chain of 25 supermarkets across14 cities of the western and southern regions of Saudi Arabia.

The company has reported sales of approximately 800m riyals in 2011, an increase of 17 per cent since 2010, the statement said.

Al-Raya was founded more than 20 years ago by the current management and serves more than 50,000 customers daily across the cities it operates in, which include Jeddah, Najran, Jizan, Madina, Sabya and Taif.

Commenting on the transaction, Salameh Sweis, Chief Executive Officer of Levant Capital said in the statement, "We are pleased to have acquired a controlling stake in Al-Raya. The food retail sector in Saudi Arabiahas been experiencing significant growth, driven by increases in population and disposable income and the supermarket segment within the food retail sector is expected to grow faster than the overall market as consumers continue to migrate towards organised retail, which Al-Raya is well positioned to capitalise upon.”

Mr MajedAl-Khammash, founder and CEO of Al-Raya, said: "We are delighted to partner with Levant Capital and CVCI for the next chapter in Al-Raya’s history. We have an ambitious growth plan that involves rolling out new stores. We want to more than double in size over the next few years and we look forward to leveraging the experience and know-how of our new shareholders to support us in achieving this plan. Our expansion will continue to focus on our core markets where we want to remain the grocery shopping destination of choice for Saudi families.”