IHC sets out plan to create Mena’s largest tech company

Reuters/Ben Job

• Focus on acquiring majority stake in tech firms
• IHC is UAE’s most valuable listed holding company for non-oil sector  

International Holding Company (IHC), the Abu Dhabi-based conglomerate, plans to create the largest tech holding company in the Middle East and North Africa (Mena) region.

IHC said it wants to scale up its IT businesses as part of the long-term strategy to grow its capacity in the tech industry across different sectors.

The company added that it has increased its technology deals by 100 percent compared to last year, crossing $272 million in the first 10 months.

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The acquisitions included a 55 percent stake in Cyber security service provider CyberGate, an increase in Esyasoft ownership from 20 to 42 percent, a 54 percent interest in Emircom Middle East and 15 percent in Bayanat, an AI-powered predictive geospatial intelligence technology company, which is planning to list in Abu Dhabi via IPO later this month. 

“We are rapidly scaling our technology businesses portfolio, already raising short and long-term acquisition targets with a clear path to achieve further profitability in the next 12 months,” said Syed Basar Shueb, IHC’s CEO.

In a statement, IHC said it is looking to deepen its engagement and investment in the tech space regionally and globally as the sector dominated mergers and acquisitions (M&A) in 2021, setting records in deal value and volume. 

Technology M&A in 2021 increased by 71 percent from 2020 levels, with dealmaking totalling $1.1 trillion and accounting for 20 percent of all global merger and acquisition deal value.  

“We are certain there is potential for further growth in the tech sector, locally and regionally, as our market remains stable with an attractive growth rate,” Shueb added.

“This is an excellent period for dealmaking opportunities if companies can achieve their value-creation objectives. We are mapping our tech target’s acquisition approach, which will have a diversified yet strong industry portfolio.” 

IHC was founded in 1998 as part of an initiative to diversify and develop non-oil business sectors in the UAE and has grown to become the most valuable listed holding company in the Middle East with a market cap of $176 billion as of September 30.

Comprising more than 372 subsidiaries and 52,345 employees, IHC also has holdings across sectors including real estate, agriculture, healthcare, food and beverage, utilities, retail and leisure.

Earlier this month it announced a capital investment of $200 million in Lulo Colombia, the holding company of the country’s first regulated digital bank, Lulo Bank.

Raghu Mandagolathur, CEO of Marmore Mena Intelligence, has compared IHC to the US finance giant which employs nearly 378,000 people with $900bn in assets, saying there are parallels around their business models.

Earlier this year IHC also invested two billion dollars in Indian multinational conglomerate Adani Group, representing 4.87 percent of the total trade between the UAE and India, which reached $41 billion between 2020 and 2021.