Modern Mills has priced its IPO shares at SAR 48, generating an order book of SAR 150 bn from institutional investors and valuing the company at SAR 3.9 bn, it said in a statement (pdf). The milling company is taking 24.5 mn shares to market — good for a 30% stake — in a SAR 1.2 bn secondary sale.

The order book was 127x covered, implying strong investor appetite for the shares of the food manufacturer. Bloomberg reported earlier this month that the offering was fully covered only a few hours into the book-building process. The transaction is expected to set selling shareholders back SAR 41 mn in transaction costs.

What’s next for the transaction: Individual investors will have a two-day window starting on Tuesday, 5 March to place their orders for a maximum of 10% of the offered shares — 2.5 mn shares — according to the prospectus (pdf).

What’s next for the company: Modern Mills aims to grow its market share by adding new products to its portfolio, venturing into new product categories, and expanding geographically, said CEO Osama Ashi.

Lock-up period: The three substantial shareholders will be restricted from making any transactions on their shares for a period of 6 months from the first day of trading on Tadawul’s main market.

By the numbers: The milling company’s net income dipped 2.9% y-o-y to SAR 105 mn in 6M 2023, while revenues declined 2% y-o-y to SAR 452 mn over the same period. MMC has grown its volume share in the wheat flour category to 24% in 2022, up from 20% in 2021. The company currently operates four mills across the Kingdom with a daily processing capacity of 3.5k tons of wheat and 1.4k of animal feed.

ADVISORS- HSBC Saudi Arabia is quarterbacking the transaction as financial advisor, joint bookrunner, underwriter and lead manager, while Emirates NBD Capital KSA is joint bookrunner and underwriter. Al Rajhi Bank and SNB are receiving agents. Moelis & Company Saudi are advisors to selling shareholders.

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