By Sona Nambiar and Sreenivasa Rao Dasar

Depa, the Nasdaq-listed interior contracting company, is eyeing two to four new acquisitions in 2010, according to a senior official.

Carrara has worked in Yas Island Marina Hotel. (EB FILE)
Carrara has worked in Yas Island Marina Hotel. (EB FILE)

“We are looking at two to four acquisitions in 2010 and those will continue our international expansion plans, which started 10 years ago, as well as our vertical integration strategy, which we have pursued for a while now,” said Hadi El-Solh, Depa’s Managing Director of Investments, in an interview with Emirates Business.

He said he could not “disclose the precise sectors or markets right now”.

Depa yesterday announced that it has wholly acquired Carrara Mid-East Industrial, one of the region’s first producer and installer of stone. Carrara’s operations include three facilities in the UAE, which serve the Middle East, India and Africa.

Solh did not reveal the value of the acquisition.

“It’s a 100 per cent acquisition and will be carried with cash and debt for which, the ratio is yet to be decided. Depa’s vertical integration strategy has been in place for around a decade. We are always on the lookout for good opportunities in our target markets,” he said.

The company recently decided to split its shares into two for one and sought to list in dirham instead of the dollar. Depa shares on Nasdaq Dubai were trading at $0.680. After the acquisition, Carrara will get a boost from Depa for its expansion programme.

“With no expansion of existing production facilities, Carrara is able to generate around Dh200-Dh250 million in revenues with its existing set up. However, we will definitely be helping this company to grow and expand further,” added Solh.

“We already have a close working relationship with Carrara having both worked on key iconic projects such as Burj Khalifa and Burj Al Arab. There are strong synergies between Depa and Carrara, which will be unlocked as a result of this transaction, particularly given that the majority of our projects have stone requirements.” About 15 to 20 per cent of a typical project goes into stone requirements, he added.

The company imports the slabs into the UAE, processes them and then re-exports to countries where it has projects. “In terms of material, apart from marble, they also do granite, limestone and onyx. They have their own installation teams in those markets or else use sub-contractors. Hence, it does not need fully staffed offices in other countries,” said Solh.

“However, Depa has a presence in 18 countries and Carrara can leverage a lot of our existing infrastructure. In countries, where they do not have projects, we can introduce them to new clients and vice-versa. There is quite a bit of synergy to be made. Once the company is fully absorbed in Depa, its financials will be consolidated into the Group’s financials. Hence, we will provide the necessary support to continue Carrara’s international expansion drive to serve clients outside of Depa, in growing markets such as Saudi Arabia, India and even Azerbaijan and Nigeria.”

Carrara has recently executed the supply and installation of about 120,000 sq m of natural stone for the Burj Khalifa project and its work portfolio includes projects such as Burj Al Arab, Royal Mirage Hotel, Yas Island Marina Hotel, Aldar headquarters, Turkmenistan Parliament Building, Presidential Palace and President Hotel.

Depa United Group was established in early 2006 as a private joint stock company to consolidate its subsidiaries and the business of interior contracting.