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The IPO of Modern Mills Company (MMC) saw strong demand from retail investors with a 22x oversubscription rate, according to a disclosure to Tadawul. The flour milling company is set to debut a 30% stake on the main market Tadawul (pdf) — with 20 percentage points allocated to institutional investors and the rest to retail investors. MMC has priced the IPO top of the range at SAR 48 a share, valuing the company at a SAR 3.9 bn.
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.
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.
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.
Another milling IPO: The Fourth Milling Company (MC4) is set to IPO in 1H 2024. MC4 tapped Riyad Capital as financial advisor for the transaction back in January.
OTHER IPO NEWS-
#1- Al-Hokail Academy Specialized Digital Polyclinics Company is set to debut a 29% stake on parallel market Nomu after receiving approval from the Capital Market Authority. No further details were provided.
#2- Al Mohafaza Education’s IPO on Nomu was priced at SAR 18 apiece, Argaam reported yesterday, citing a statement from financial advisor and lead manager Yaqeen Capital. The offering of 1.6 mn ordinary shares was 4x oversubscribed. The private schools operator is set to debut a 20% stake on parallel market Nomu.
