Private equity house Fajr Capital is in talks to buy a majority stake in Gulf food and beverage franchising group Cravia, sources aware of the matter said on Tuesday.

Fajr Capital is conducting due diligence on Cravia, which owns the licence to operate brands such as American bakery Cinnabon and Lebanese restaurant Zaatar W Zeit in the UAE, according to a private equity and an investment banking source familiar with the deal.

The private equity source said the process was advanced and a deal would be closed "soon".

The proposed deal is the latest in the region's food and beverage sector, which has attracted interest from investors partly because this business is expected to escape the worst effects of an economic slow-down caused by lower oil prices.

Earlier this year, Fajr was was one of the initial bidders for a majority stake in Saudi supermarket chain Al Raya for Foodstuff Company.

Fajr Capital declined to comment. Cravia did not respond to Reuters' requests for comment. The sources spoke on condition of anonymity as the information is not public.

Cravia chief executive Walid Hajj was quoted by media firm Mergermarket in August as saying he was looking to sell a stake to investors in 2016.

The report cited Cravia's annual turnover to be Dh250 million ($54.5 million) from 71 outlets, which are mostly in the UAE.

Cravia, which recently acquired rights to franchise American fast-food chain Five Guys in Saudi Arabia and Bahrain, has been in exclusive talks with Fajr Capital for some time, according to the private equity source and a Dubai-based banker.

The Dubai-based private equity firm has looked at Cravia in the past and submitted an offer a year ago which valued a majority stake at around Dh300 million ($81.7 million), based on ten times earnings before interest, taxes and depreciation (EBITDA), according to the investment banking source. This source said those talks fell apart due to a valuation mismatch.

DeNovo, an advisory firm run by May Nasrallah, a former head of investment banking in the Middle East and North Africa for Morgan Stanley, is advising Cravia and Deloitte is assisting Fajr Capital, the private equity source and the Dubai banker said. - Reuters