UAE-based Grako - a specialised facility management (FM) company known for its high-level access cleaning and maintenance services, which includes serving massive projects like Burj Khalifa and Dubai Airports for many years - along with its sister company, Gecko Middle East - specialising in industrial rope access and coating solutions - has entered into a strategic partnership agreement with one of UAE’s largest conglomerates, the National Catering Company (NCC Group). Clean Middle East uncovers the details of this partnership while also seeking to understand how this partnership will impact the market.
Since its establishment in 2004, Grako has received multiple FM industry awards for its utmost commitment to safety, high-quality workmanship and client satisfaction rating. Today, the company is considered as the region’s foremost when it comes to high-level rope-access cleaning, maintenance, and safety practices. This has made Grako a distinguished service provider for the UAE’s top master development and asset management companies in the properties, hospitality, entertainment, retail and public sectors.
Gecko, the sister company of Grako, has been operational since 2003 and is globally known to be one of the very first pioneers in industrial rope access in the region. The company has expanded its expertise tremendously ever since. Today, Gecko offers a highly specialised range of capabilities, on and off ropes, across numerous industries helping clients gain immediate access to inspect, maintain, repair and protect their multi million-dollar assets.
Alain El Tawil, Founder and CEO of Grako and Gecko, avers, “Our firm promise – quality first and foremost – has steered our lead for the last 15 years in this competitive business, allowing us to deliver unmatched results to our customers every day without fail. As a result, over the years, we have achieved many distinctions, and our growth has been exponential year after year. Our vision for growth has no limits, and we are very proud to join forces with such a reputable Emirati organisation. Along with NCC, we look forward to exploring the new prospects this strategic partnership will create for both Grako and Gecko.”
The National Investor PrJSC (TNI) acted as the financial advisor and lead manager to NCC on the transaction, which is aimed at unleashing the growth potential that the newly formed partners can capitalise on, given the national investments and growth expected in select sectors like FM, oil and gas and maritime industries. His Excellency Abubaker Seddiq Al Khoori, Chairman, TNI, adds, “This dynamic partnership, whereby NCC acquired majority shares in both Grako and Gecko, will add new momentum to business growth for all parties immediately and in the long run.”
Reaching new heights
Both Grako and Gecko will continue to operate independently, led by Alain El Tawil, who is keen on expanding his Abu Dhabi operations further by leveraging NCC’s well-established client base and especially reaching the oil and gas and maritime industries.
Al Khoori informs, “We have been studying all viewpoints of this transaction for about 10 months. Finalising this partnership, we believe that we have placed NCC, Grako and Gecko in a wider window of opportunities for the next 10 years, especially with the recent growth outlook across the FM and industrial sectors. In the UAE, this partnership is expected to be even more promising.”
Furthermore, NCC, headquartered in Abu Dhabi, is one of the largest support services conglomerates in the UAE, specialising in industrial and corporate catering, facilities management, engineering, retail and F&B. This alliance supplements NCC’s robust portfolio of services even further, to cater to Abu Dhabi’s marketplace dynamics and challenges, by joining forces with Grako and Gecko, especially in light of tighter health, safety and environmental regulations and the growing demand for specialised FM and industrial services.
Abdullah Mazrui, Chairman of NCC, shares, "Both Grako and Gecko have deep knowledge and expertise in their respective fields, which should prove to be extremely valuable for our current and future customers. This partnership aligns with our core strategy on many fronts and reflects NCC’s commitment towards driving growth in our focus sectors by partnering with leading players with high growth potential. We consider Grako and Gecko to be the most suitable partners for NCC to accelerate our growth ambitions in both the FM industry and our support services business targeting industrial sectors. The partnership with Gecko will add to our range of services in the oil and gas sector in Abu Dhabi, while the Grako partnership will strengthen our foothold in Dubai and the Northern Emirates. We expect significant cross selling initiatives between the businesses, but beyond this, we have started looking at strategic initiatives in Dubai, to leverage the group’s buying power.”
“We are in the process of integrating both Grako and Gecko into the NCC Group so they can benefit from our scale, processes, governance, which are expected to generate significant synergies. In the short term, there are great opportunities in Dubai as the Expo 2020 draws near, and we fully intend to capitalise on them. In the long term, Grako and Gecko will become the focal point of NCC’s facilities management platform,” Mazrui concludes.
On the occasion of the recent partnership deal Alain El Tawil (AE), Founder and CEO of Grako and Gecko, along with Tarek El Goweiny (TG), CEO, NCC, talk to Rashmi Karanjekar about the processes, challenges and new avenues while undergoing the partnership deal…
Why this partnership?
AE: I started my journey 15 years ago with just three people, and today we are a 500 man-strong organisation. When we were approached by NCC - which is considered one of the largest UAE-based conglomerates - we were proud of our success. Similarly, we were equally impressed by NCC’s management profiles, their market reach and most of all, their inspiring story which resembles ours. The process of this partnership agreement has been very smooth throughout the past 10 months, especially given that Grako, Gecko and NCC have many synergies and parallels that paved a perfect platform for partnership and growth potential in a market that is in favour of consolidation.
Besides NCC’s prominent presence in Abu Dhabi and the rich experience of their management team, we found that their vision complements ours. With our ambition to grow Grako’s business in Abu Dhabi and our immediate goal of growing Gecko’s operations in the oil and gas and off-shore sectors; it became clear that it is a perfect alliance.
What are the market demands that made it happen?
AE: All market indicators are in favour of high growth potential for Grako and Gecko. We already feel the positive impact as the oil and gas sector began picking up in early 2018. Meanwhile, the FM industry will witness massive growth attributed to increase in tourism and construction contracts estimated at $629bn in the UAE alone; most of which are expected to be completed by 2021, this includes the on-going preparations for Expo 2020.
What are the new opportunities you foresee after this partnership?
AE: NCC is a huge company that is 5,000 people strong with a robust presence in Abu Dhabi’s oil and gas sectors, besides their on-going focus on regional expansion. Partnering with them will definitely take us to the next level. As NCC has already established years of commendable reputation for quality with its customers, the moment they open up opportunities with their existing client base for Grako and Gecko, their word of recommendation will be highly valued and considered. And we are keen on presenting NCC at that same level of professionalism and quality their customers expect from them.
As for Grako’s opportunities in Dubai, we will continue to do what we do best, develop new business and deliver the most rigorous rope access cleaning and maintenance operation to our valued customers, all the same.
What is your vision towards the new joint venture?
TG: When it comes to acquisitions, it's like getting in to a marriage, and it's quite crucial that there are a few things similar in the two companies involved viz. their vision of the future should be unified, an equal dedication towards a common goal, and most importantly complementing each other where necessary. With Grako and Gecko on boarding the NCC group, operating independently, we have already established our common goals of growth for the next three years; we have also found the similarities in the dedication and drive that made such a partnership possible in the first place.
As for complementing each other’s offering, while Grako is a Dubai-based company, and we're in Abu Dhabi, both the companies can synchronize well together and offer better value. NCC group of companies is about food, life support and other services, but when we talk about segmentation, we're almost in the same segments, so cross selling was another obvious advantage moving forward.
Tell us about TNI’s role in this partnership?
TG: TNI is playing a dual role - firstly it is the financial advisory for NCC in this acquisition, and it is also a shareholder and a leader of a consortium of other shareholders within NCC. We have had a very positive experience working with TNI ever since its consortium of shareholders acquired 50 per cent of NCC.
What were the challenges involved in making this partnership possible?
AE: It was a process that took about 10 to 12 months; NCC and TNI were very thorough with due diligence, and they were happy with our audit statements. There weren’t any major challenges apart from the negotiations, which is a normal process, but both NCC and we were looking for a win-win situation so we came to a very fair evaluation based on the market standard. However, it's the relationship and attitude we share that made this happen. I'll be honest, there have been a few companies that approached us in the past two years, and it was not the money or how big they were. Being partners for us means how we can work together and what we can achieve together. We are striving to do more, offer better services and grow, and we found the same mindset with NCC’s board and management team.
How will the acquisition impact Grako’s business in the region?
AE: We are putting a new strategy and plan together for 2019, which will be reviewed by the board chaired by Mr. Tarek before we start executing it. In general terms, our focus will be the oil and gas market and to become one of the largest rope access specialists in the world following this collaboration with NCC. Both Grako and NCC are UAE-based companies and it's great to see them expanding internationally into new markets like Egypt.
TG: Expansion was always on the agenda, which led us to opening a branch in Kuwait; we have a license in Egypt and have signed an MoU with people who are managing the project there for us; we have a sister company in Oman so we're present in the region. However, we're focusing more now on developing within the Dubai and Abu Dhabi because these are still two of the healthiest markets in the region. Also, the new partnership with Grako and Gecko will allow us to add new FM and industrial services that will provide value to our customers so the expansion is not limited to geography, but it also represents the additions in the range of service we can now offer immediately.
How will the partnership deal will be viewed amongst competitors?
AE: We believe the competition will be looking at us closely because of this partnership given NCC’s reputation and reach in Abu Dhabi’s oil and gas market. We have been working on this deal for almost a year, and we made sure to be ready and prepared to expand our operations to take on large projects as and when NCC facilitates new opportunities. Meanwhile, our aim is to keep doing what we do best with the best experienced specialists in our field and the highest certifications, and to maintain our spotless health and safety track record.
With the Expo 2020 making a buzz the world over, how do you foresee growth in cleaning and FM market?
AE: The Expo 2020 will have a huge infrastructure hence we foresee the project being awarded to multiple FM services providers given the scale of the project. We have collaborated with all the FM companies who are bidding for the full range of Expo 2020 FM services, and through them we have bid for all the high-level facade cleaning requirements. We are very positive that we will manage to play a role in serving the facility. Besides, we are aiming for long-term business relationships and continuity, so the focus is not just on the Expo, which will last for six months or the quarter prior to the event, but also on how we can take it forward after the Expo. Post the Expo, we believe that the massive multi-billion dollar infrastructure will still need professional services to keep it in pristine condition, and who better to do it then us.
Will there will be any strategic moves that both the companies will make to create a competitive edge?
TG: While both companies Grako and Gecko will remain independent, we foresee the potential of offering them centralised back-end support to help them stay competitive in a tough and price- sensitive market. We will take the time to study any opportunity where we can help Grako and Gecko achieve increased efficiencies or extending them any cost savings that we enjoy as a large organisation. We believe acquiring companies is not about being powerful or in control; it is more about investing in continuous growth and leading on their success story.
What are the challenges and opportunities you foresee in the next few years?
AE: The first and foremost opportunity will be penetrating new segments locally and the second is geographical expansion - each of these growth opportunities will have their own set of challenges that we are ready to overcome alongside NCC. Meanwhile, the current market is becoming more price oriented, and there are budget constraints, which is a common scenario in every industry. During such circumstances we, perceive this market situation as an opportunity to innovate and do what we did in 2008 when the market sentiments were low. We analysed each project in detail to ensure we provide an accurate cost effective solution without resorting to over-scoping which most companies tend to do – either over-estimate or under-estimate a project scope. We focused on providing accurate solutions considering the budget and we paid particular attention to increasing our productivity to deliver projects sooner which allowed us to extend any saving back to our clients.