Zawya Ltd.

Zawya Acquired by Thomson Reuters

On the heels of rumors in April that Zawya was preparing for a multimillion dollar acquisition, majority shareholder Saffar Capital has confirmed today that the site is being acquired by Thomson Reuters. Previously, three other companies- intelligence service Mergermarket (part of FT Group), media company Emap (partly owned by The Guardian), and Indian credit-ratings agency Crisil, were in the running. Today, sources suggest that Thomson Reuters will acquire Zawya in a deal rumored to approach $40 million, Arabian Business reports. This number has been circulating but is not confirmed. In a comment to Wamda, Saffar Capital CEO Michael Hewitt said, "We're quite pleased with the acquisition. When we invested in Zawya, it was a very small company, and investing in an internet-based model after the burst of the dot-com bubble, in the Middle East, right after 9/11, was a bold move. Yet it demonstrated our foresight. Zawya provides clarity and transparency in a region that's known for being opaque. We transformed the business model to become a subscription-based business model, and the business grew quite rapidly, along with and in parallel to the growth of the Middle East region." "To have worked with the founders of the company to develop the company to what it is today, where it's acquired by the likes of Thomson Reuters, is a big success for this region and for private equity investment in this region," he added. Hewitt confirmed that Saffar Capital, which acquired a 60% stake in Zawya in 2001, is divesting its entire stake in the company. "It's up to the new owners to determine how to take the company forward, but Zawya has always been an innovative company for this region, and I would think that culture would continue." Saffar could not comment on the amount, but Hewitt noted that the sale came at a far more opportune moment than the previous potential sale in 2008, which was being negotiated when the financial crisis hit. Now, he reiterates, "We've been able to create significant returns for our shareholders." Sources say that Saffar may receive between US $5 and $6 per share for their stake of Zawya's 7 million shares, for a total value of $21 and $25 million. The company has appointed U.K.-based corporate finance advisory company Arma Partners to advise on the sale. Yet the rumored valuation of $40 million may be low; in 2008, the site was almost sold for close to $12 a share, at a valuation of $80 million. Zawya, a leading portal for business news and analysis in the Middle East, was founded in Dubai in 2000 by Ihsan Jawad, Zaid Jawad, and Husain Makiya, who left to start venture capital firm HBT Ventures (Honeybee Tech Ventures) in late 2010. In April, the National reported that Zawya now has 5,000 paying subscribers and around 750,000 monthly unique visitors, and employs 200 staff in the UAE and Lebanon. Current CEO Gunnar Skoog pledged that the site will have "double-digit growth" this year, and also revealed that the site would have a new CEO within 6 weeks. That change has not yet been announced. For Thomson Reuters, which is expanding in the Middle East and North Africa, the acquisition may offer a chance to incorporate a wealth of business news and analysis under a well-known brand, that, at $6,000 for a full yearly membership, costs less per year than either Reuters or Bloomberg, says Arabian Business.

United Arab Emirates · 24 Jun 2012

The sale of online finance and business portal Zawya is close to being finalised, Arabian Business can reveal. It is understood that the company will be sold for about US$40m and an announcement from the group is expected shortly. Media giant Thomson Reuters is believed to have been negotiating a takeover of the company for some weeks, and sources suggest it is the most likely buyer. The majority of the company’s 7m shares are held by Dubai investment company Saffar Holding, which sources say will receive between US$5 and US$6 per share. Zawya was almost sold four years ago - just before the global financial crisis - for close to US$12 a share in a deal that would have valued the company at closer to US$80m. Zawya, which was founded in 2000 in London, aggregates content across the MENA region and provides news coverage of the Middle East. It currently employs 200 staff in the UAE and Lebanon. The company was launched by British-Iraqi investment banker Ihsan Jawad at the height of the dotcom boom, before relocating to Dubai and going into partnership with Dow Jones Newswires in 2006. On top of its subscription service, the Zawya website attracts 750,000 visitors a month. With full membership costing less than US$6,000 a year, it is priced much lower than other information services providers like Bloomberg and Thomson Reuters, both of which have been expanding in the Middle East. In 2009, Yahoo!, which runs the second-most popular internet search engine, agreed to buy Arabic-language internet venture Maktoob.com, the largest portal in the Arab world, for about US$165m. Saffar Holdings had acquired a 60 percent stake in Zawya in 2001 and appointed corporate finance advisory company Arma Partners last October to advise on the sale of the portal. Zawya Chief Financial Officer Kalpesh Desai declined to comment when contacted by Arabian Business. In a statement to Arabian Business, a spokesperson for Thomson Reuters said: "As a matter of policy, Thomson Reuters does not comment on rumours or speculation about acquisitions." Calls to Arma Partners and Al Saffar Capital were not returned. For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

United Arab Emirates · 16 May 2012

Suitors line up for business portal Zawya

A multimillion-dollar sale of the Middle Eastern business portal Zawya is expected to be finalised next month, with several global and regional media companies in the running. Thomson Reuters, Emap and Pearson, which owns the Financial Times, have expressed an interest in acquiring the website, The National has learnt. If negotiations are successful, Zawya is expected to be sold for tens of millions of dollars, with a new owner chosen within six weeks. Gunnar Skoog, Zawya's chief executive, said several companies were negotiating with the owners of the site. "We are in final stages in the sales process," said Mr Skoog. "In four to six weeks we will have clarity on who the new owners of Zawya will be." International and regional companies were vying to buy the portal, Mr Skoog said. "It has reached the final stage of due diligence. And there are a number of regional and international players that are negotiating with the owners." Saffar Holdings, a Dubai investment company that holds a 60 per cent stake in Zawya, last year appointed Arma Partners, a London consultancy, to advise on a sale of the portal. Mr Skoog declined to specify names of bidders for Zawya. However, people involved in the transaction identified four companies that have expressed an interest in acquiring the site. They are Thomson Reuters, a business-data provider; Mergermarket, which is part of FT Group, a division of Pearson; the British media company Emap, whose Middle Eastern subsidiary owns MEED and the business site AMEinfo.com; and Crisil, an Indian credit-ratings agency. Sources at those companies either declined to comment or did not respond to inquiries. Mr Skoog would not confirm who had submitted bids, but he acknowledged that the four companies named were among the "players that have a vested interest in getting better coverage" of the region. "I'm confirming that those are among the financial players that have, or might have an interest in Zawya," he said. He also suggested that more than four companies have expressed interest. Zawya has a partnership with Dow Jones to provide a newswire service in the Middle East. Mr Skoog said Dow Jones, which is part of Rupert Murdoch's News Corp empire, had been involved in the sale process, but he would not comment on whether the media company had submitted a bid. "Dow Jones has been included in the whole process; it is a very important partner to us," said Mr Skoog. "We certainly hope that Dow Jones can stay with Zawya." Zawya derives most of its revenue from subscriptions to its premium information service. It also sells advertising on its free site. The portal says it has "over 5,000" paying subscribers and 750,000 unique visitors to the free website. "Obviously we want to improve," said Mr Skoog. "We had double-digit growth last year; we're going to have double-digit growth this year. And our ambitions are very high." Zawya has 200 employees in the UAE and Lebanon, and this month unveiled a new website design and brand identity. "Zawya has been around for quite a long time here in the Middle East," said Mr Skoog. "We launched in 2000 and have stayed with the logo and with the way the website has looked since that time. So it was time to move on."

United Arab Emirates · 7 Apr 2012