Arabian Mills for Food Products Co. aims to raise up to $271 million by offering a 30% stake in an upcoming initial public offering (IPO). The Saudi-based company plans to sell around 15.4 million shares, priced between 62 riyals and 66 riyals per share, which equals approximately $16.50 to $17.60 per share.
Key Dates for Investors
The IPO will proceed in two phases. The book-building period for institutional investors runs from September 1 to September 5, with final pricing expected by September 11. Retail investors can subscribe from September 18 to September 19.
Backed by Major Shareholders
Shareholders, including Ajlan & Bros, Sulaiman Abdulaziz Al-Rajhi International Company, and the National Agricultural Development Company (NADEC), are offering the 15.4 million shares. This offering represents 30% of Arabian Mills’ paid-up capital, following the Capital Market Authority’s approval in June 2024.
Part of Saudi Vision 2030
Arabian Mills founded in 2017 as part of Saudi Arabia’s Vision 2030 strategy, aiming to diversify the economy beyond oil. In 2021, a consortium consisting of Al Othaim Markets, Allana International, and United Feed Manufacturing Company acquired the company for $229 million (SAR 859 million).
Impressive Financial Growth
Arabian Mills reported revenues of SAR 862 million in 2023, with a compound annual growth rate (CAGR) of 16% since 2021. During this period, profits grew at a CAGR of 23.2%, reaching SAR 200 million. The company also generated SAR 238 million in free cash flow in 2023, with a cash conversion rate of 27.5%.
Strong IPO Market in Saudi Arabia
Arabian Mills has announced its IPO, following a recent one by Saudi perfume maker Al Majed for Oud Co. This IPO was fully subscribed within hours. The ongoing activity in Saudi Arabia’s equity capital markets signals a busy year ahead. This follows a strong first half, which featured a $12 billion secondary offering by Saudi Aramco.
Fourth Flour Milling Firm to Go Public
Arabian Mills is the fourth Saudi flour milling company to announce an IPO since the government privatized the state-controlled industry. First Milling Co. and Modern Mills Co. are already listed on the Saudi stock exchange, while Fourth Milling Co. received IPO approval in June.
HSBC Saudi Arabia serves as the sole financial adviser, global coordinator, book-runner, underwriter, and lead manager for Arabian Mills’ IPO. Al Rajhi Bank, Saudi Awwal Bank, and Banque Saudi Fransi are acting as receiving agents.
