Drake and Scull buys stake in Kuwaiti firm



Drake and Scull International (DSI), an engineering firm based in Dubai, has bought a stake in Kuwait-based Drake and Scull International for Electrical Contracting as it expands its services in the Gulf. The Dh80.5 million (US$21.9m) purchase by DSI is its second acquisition in the past two months and brings to 75 per cent its holding in the electrical contracting firm, which is owned by Drake and Scull Group and Kuwait Holding. The firm specialises in mechanical, engineering and plumbing contracting in Kuwait.

Since listing its shares on the Dubai Financial Market General Index this year, DSI has been on an acquisition drive for undervalued companies as it seeks to take advantage of the global construction slowdown and strengthen its capacity. The company paid Dh145 million last month for an 82 per cent stake in Passavant-Roediger, a unit of Germany's Bilfinger Berger which provides municipal and industrial purification services household refuse treatment.

With a cash pile of about Dh500m to fund purchases, DSI also plans to acquire a firm in Qatar. "Our interest lies in acquiring companies that already have prominence in their own markets and an in-depth understanding of how their markets operate," said Khaldoun Tabari, the vice chairman and chief executive of DSI. DSI, which has more than Dh5 billion worth of projects across the Middle East and North Africa, has weathered the global economic downturn better than rivals who were overexposed to residential building, which has slowed dramatically this year as developers cancelled some projects and slowed payment on others.

The company made a net profit of Dh239m in the first nine months of this year, up nearly 50 per cent from the same period of last year. DSI expects its acquisitions to help it expand across sectors including infrastructure and water and power, where regional governments in particular are continuing to spend. Its existing business has also prospered, having won seven contracts so far this year worth a combined Dh2bn.

The company is targeting contracts in North Africa as part of its expansion plans. It is also working on a contract to build a district cooling plant in Sudan and is bidding for projects in Libya. @Email:agiuffrida@thenational.ae

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