Fakeeh Care IPO looks set to be Saudi’s largest listing so far this year

Private healthcare provider Fakeeh Care Group is looking to raise up to SAR 2.9 bn from its IPO on Tadawul’s main market in what is on track to be the largest share sale in the Kingdom so far this year.

Investor appetite is strong: Fund and portfolio managers fully covered the IPO in just the first hour that bankers started taking orders on Thursday, Bloomberg says. Bankers say they will price the transaction in the SAR 53.00-57.50 per-share range.

The UAE’s ADIA is emerging as a key buyer in Fakeeh Care IPO: UAE’s largest sovereign wealth fund Abu Dhabi Investment Authority (Adia) is is set to purchase 1.04 mn shares as a cornerstone investment in Fakeeh Care’s IPO, according to a supplementary prospectus (pdf). Alongside Olayan Saudi Investment — the other cornerstone investor — the two funds will buy 1.99 mn shares.

What’s next: Bookbuilding for institutional investors will continue until Wednesday, 8 May, while orders from retail investors will run from Tuesday, 21 May to Wednesday, 22 May. Bankers will price the sale on Tuesday, 14 May.

About the IPO: Fakeeh Care, formally Dr. Soliman Abdul Kader Fakeeh Hospital, is taking a 21.5% staketo market through an offering of both new and existing shares: It plans to offer 30 mn new shares and 19.8 mn existing shares held by the Fakeeh family. Upon completion of the offering, current shareholders (members of the Fakeeh family) will collectively own a 77% stake in the company. Check out the key documents in the IPO here on the transaction microsite.

The IPO by the private healthcare provider comes as listings in Saudi pick up pace. Bankers wrapped up on Thursday the institutional tranche of water treatment company Miahona’s IPO. Nearly USD 697 mn were raised through IPOs in the Kingdom so far, with the largest current IPO being Modern Mills which listed in March.

Saudi healthcare companies are on a roll: Al Hammadi (2015) and Saudi German Healthcare (2016) led the way with high-profile IPOs, with Dr Sulaiman Al Habib, pharma group Al Nahdi Medical, and drugmakers Jamjoom Pharma and Avalon Pharma all having followed suit. Aster DM Healthcare, meanwhile, is said to be looking to spin off its GCC unit with a dual listing on Tadawul and the Dubai Financial Market.

Advisors: Our friends at HSBC are acting as sole financial adviser. HSBC is joint bookrunner together with our friends at EFG Hermes as well as ANB Capital. Moelis is advising the selling shareholders, while AlRajhi Bank, Saudi National Bank, Arab National Bank, SAB, Alinma Bank and Bank Aljazira are serving as receiving banks.