Bawan Co.’s $175 Million Acquisition of Petronash Holding

Written By Abdulmjeed Almutairi

Overview of the Deal

Acquirer: Bawan Co. (Saudi Arabia)

Target: Petronash Holding (UAE)


Implied Equity Value: $175 million (approximately SAR 656 million)

Total Transaction Size: $175 million (adjustable based on future performance)

Expected Closing Date: 2025 (subject to regulatory approval)

Target Advisor: Freshfields Bruckhaus Deringer (legal), Piper Sandler (financial)

Acquirer Advisor: Khoshaim and Associates (legal), PricewaterhouseCoopers (financial), Rystad Energy (commercial)


The acquisition of Petronash Holding by Bawan Co. for $175 million marks a significant step in Bawan’s strategy to diversify into industrial sectors offering specialised engineering solutions. Petronash, a leading supplier of engineered solutions for the oil and gas industry, operates primarily in the GCC and employs around 1,000 staff across multiple manufacturing locations. This acquisition enables Bawan to bolster its position in the oil and gas sector and capitalize on Petronash's established market presence in the GCC and beyond.

For Petronash, the deal provides access to Bawan's financial resources, enabling expansion and growth while maintaining its focus on delivering high-quality engineering solutions. Bawan is set to acquire 80% of Petronash’s shares initially, with a payment structure linked to the company’s future financial performance.


Company Details (Acquirer - Bawan Co.)

Bawan Co. is a diversified Saudi conglomerate operating in the building materials, industrial, and manufacturing sectors. The company focuses on delivering innovative solutions and has a strong presence in the GCC market. It has made several acquisitions in recent years to diversify its operations and improve its overall market position.


Founded: 1980

Headquartered: Riyadh, Saudi Arabia

CEO: Mohammed Ahmed Salman

Number of Employees:

Market Cap: ‪2.94 B SAR

TTM Revenue: ‪‪3.06 B SAR

TTM EBITDA: ‪‪213.28 M SAR

TTM EV/Revenue: ~1.11x

TTM EV/EBITDA: ~15.85x

Recent Transactions: Recent acquisitions in the industrial sector to support diversification strategy.



Company Details (Target - Petronash Holding)

Petronash Holding is a leading UAE-based manufacturer of engineered solutions for the oil and gas sector. Founded in 2000, the company specializes in providing integrated engineering solutions for upstream, midstream, and downstream oil and gas operations. It operates primarily within the GCC region, supplying national oil and gas companies and international clients.


Founded: 2000

Headquartered: Dubai, UAE

CEO: M. Srinivasa Raju

Number of Employees: 1,000+

Manufacturing Locations: Dammam (Saudi Arabia), Dubai & Abu Dhabi (UAE), Doha (Qatar), Chennai (India)

Manufacturing Area: 120,000 square meters

LTM Revenue: SAR 699 million (for the period ending 30 September 2024)



Projections and Assumptions

Short-Term Consequences

The acquisition of Petronash by Bawan is expected to yield several immediate impacts. Bawan will gain access to a robust engineering solutions portfolio, enabling it to enter the rapidly growing oil and gas sector with greater force. The acquisition’s $80 million initial payment for an 80% stake reflects the company’s confidence in Petronash’s performance, with additional payments subject to meeting financial targets through 2026.

Bawan's investment will be funded through a mix of bank facilities and internal cash reserves, giving it the flexibility to expand its industrial operations while maintaining capital efficiency. The deal also allows for synergies between Bawan’s diversified portfolio and Petronash’s established market position, enhancing revenue growth prospects.

Petronash will also benefit from Bawan's financial strength, increasing its ability to invest in operations and expand its product offering in the GCC and internationally.


Long-Term Upsides

Over the long term, Bawan expects to realize substantial synergies from the acquisition. Petronash's strong market position in the GCC, along with its established manufacturing capabilities, provides Bawan with a pathway to diversify its industrial portfolio and expand its presence in the global oil and gas sector.

The financial targets linked to the deal’s full completion will likely generate growth for Petronash, with Bawan leveraging its distribution network to accelerate the company’s expansion in the region. Bawan plans to integrate Petronash’s operations into its broader industrial segment, fostering growth through economies of scale, shared resources, and enhanced market access.

With the acquisition, Bawan is poised to become a leading provider of engineered solutions to national oil and gas companies, contributing to both its revenue growth and market share within the sector.


Risks and Uncertainties

As with any acquisition, there are inherent risks and uncertainties. The performance-based nature of the transaction introduces the risk that Petronash may not meet the agreed financial targets, which could lead to adjustments in the final price paid by Bawan. Additionally, the approval process by the relevant regulatory authorities, including the General Authority for Competition, is subject to potential delays or unforeseen challenges.

There is also the risk of integration challenges. Petronash’s manufacturing and operational systems, while highly specialized, may require adjustments as Bawan seeks to align them with its broader industrial strategy. Furthermore, the integration of Petronash’s team and culture with Bawan’s could present challenges that impact operational efficiency.

Lastly, Bawan’s ability to manage and leverage its acquisition of Petronash in a competitive market, without compromising the quality and performance that Petronash’s clients expect, will be critical to the success of this acquisition.

Abdulmjeed Almutairi
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