Khoury out of Khoury Home

EuroMena and Moussa Farhan acquire group

Khoury Home Group announced that the Khoury family has sold all its shares in the group to its two other shareholders. The leading local home appliances retailer, was valued at $64 million early in 2012 and $74 million in 2011. It was owned by the Khoury family (55 percent), Moussa Farhan (24 percent), and private equity firm EuroMena II (21 percent). The transaction included all companies of the group, around 27 companies in all.

The Khoury family has signed a Memorandum of Understanding, with a term sheet, with both partners Farhan and EuroMena II, a source involved in the deal said: “As this transaction is part of a larger one including real estate assets and other obligations and shares in other companies, the process of finalizing it will take time. Accordingly, it is not evident at this stage to identify precisely its valuation.” The valuation is expected to be below the $64 million mark. It includes real estate holdings and the business itself.

The exit of the Khoury family was expected to take place a few years from now. “The family had decided to exit the group through an earlier agreement with the EuroMena II fund." Euromena II invested around $13 million in Khoury Home Group in 2011, and increased its shareholding earlier this year. The exit was made ahead of time due to the difficult regional situation. The source sdaid: “Khoury Home has been resisting recession for quite some time. Its sales stood flat in the past two years.”

Farhan and EuroMena II will join their shares in one holding company that will control the majority of the group’s shares. The remaining shares will be held by a number of individual investors. The group will soon be forming a new board of directors with a new chairman. The partners already appointed a COO and a CFO eight months ago.

Khoury Home is expected to keep its brand name and identity, at least for the near term. A change in the brand might occur along with regional expansion, the source said. Khoury Home has evolved from a family owned and operated commerce into an institutional one.

“The transaction is a win-win situation for all parties and is the best choice for the future of the company in order to fuel its prospective expansion and growth at the local and regional levels,” the source said. The Khoury family exited with a capital gain. Khoury Home will continue to grow locally with regional expansions planned in the next few years. The group has a portfolio of over 250 brands. Its local branches increased to 12, after acquiring Hokayem in 2011.