First Abu Dhabi Bank (“FAB”) has today announced that it has signed an agreement for the sale of a 60% stake in its payments business Magnati, to Brookfield Business Partners L.P. (“Brookfield Business Partners”) together with its institutional partners (collectively “Brookfield”). The transaction with Brookfield results in an implied valuation of Magnati of up to $1.15 billion.
This transaction follows the completion of the carve-out of Magnati announced on April 4th, 2021. FAB will retain a 40% stake in Magnati post transaction and will continue its partnership via a long-term relationship agreement.
The transaction is subject to customary closing conditions and regulatory approvals. Upon completion, proceeds from the sale will be used to support FAB’s growth and transformation plans.
FAB’s expertise and relationships, coupled with Brookfield’s regional and global presence will provide a platform for Magnati to attract new regional and global partners while setting a new standard for innovation and delivery in the payments industry. Brookfield Business Partners is a business services and industrials company focused on owning and operating high-quality businesses with a track record of partnering with high-quality businesses and creating long-term value, representing a significant opportunity for both Magnati and the regional payments industry.
Magnati is the market leader for government solutions in the UAE and amongst the top two players across direct acquiring, prepaid issuing, and issuer processing. It aims to deliver its growth ambitions through its focused and agile model, underpinned by an intelligent payments platform that creates value for customers, government, merchants, and institutional clients. Magnati will retain its headquarters in the Emirate of Abu Dhabi and the transaction will result in significant Foreign Direct Investment into the UAE by a leading global asset manager.
Looking ahead, Magnati will work to capitalise on the largest payment trends in the region, including the rise of e-commerce and digital transformation. It is well-positioned to enable customers to grow their core businesses by monetising data and using next-generation technologies to deliver improved payment experiences and increased efficiency.
Hana Al Rostamani, Group Chief Executive Officer of FAB, said: “This announcement marks an important milestone and is the result of long-term planning to seek strategic partnerships to drive growth within the payments sector. Our partnership agreement with Brookfield will accelerate Magnati’s journey in a fast-paced and dynamic industry, creating broader value for all stakeholders.”
The carve-out of the payments business is part of FAB’s digital transformation process and was designed to enhance FAB’s position in the payments sector and unlock growth opportunities in new geographies and client segments.
Jad Ellawn, Managing Director at Brookfield, said: “We are pleased to partner with First Abu Dhabi Bank in charting the growth of Magnati. The payments industry is experiencing unprecedented growth, creating new opportunities for agile, pioneering payment platforms. As a preferred payments partner to leading organisations, Magnati is well placed to benefit from this shift. With this partnership, FAB and Brookfield will support Magnati’s vision of creating MENA’s leading payments platform.”
The transaction is subject to final regulatory clearance from The Central Bank of the United Arab Emirates. Morgan Stanley & Co. International plc is acting as sole financial adviser to FAB, while Freshfields Bruckhaus Deringer LLP acted as legal adviser to FAB on the transaction. Cleary Gottlieb Steen & Hamilton LLP acted as legal adviser to Brookfield.
