Abdullah Al Othaim Markets Company (4001) expects SAR 160 million (post-zakat and taxes) in profits from the initial public offering (IPO) of Fourth Milling Co. (MC4).
What
Al Othaim expects net proceeds from the offering (after deducting expenses) to reach around SAR 833 million, in favor of the selling shareholder, Gulf Flour Milling Industrial Company.
The former owns 33.3% of the latter’s capital.
So what
Fourth Milling Company hopes to raise USD 229 million from its IPO in Tadawul.
The final price for the company, which sells 162 million shares (30% of its capital), was set at SAR 5.3 per share.
This is the upper limit of the recently announced price range, giving the company a market value of SAR 763.2 million on listing.
The company previously announced that institutional coverage reached approximately 119 times of the total shares offered.
The individual subscription period will begin on Wednesday, October 2, and continue until October 3.
32.4 million shares will be allocated to individual investors (20% of the total shares offered).
Some context
Fourth Milling will join a series of IPOs in the Kingdom, most notably the March IPO of Modern Mills Company, which raised USD 314.6 million.
Key figures for Fourth Milling, according to its website:
– It has three branches in strategic locations serving over 80% of Saudi Arabia’s population.
– It holds a leading position in the consumer sector with an average market share of 31.1% in quantity, the highest among all local flour brands.
– It achieved a compound annual revenue growth rate of approximately 29.7% between 2021 and 2023.
Now what
The financial impact of MC4 IPO on Al Othaim is expected to be reflected in the fourth quarter of the current fiscal year.
The subscription process and the company’s listing on TASI’s main market are expected to be completed next month.
