Al Ahsa-based Ratio — the brand operator of homegrown coffee chain Ratio — is taking a 25% stake to Nomu, it said in a prospectus (pdf). Some 5 mn shares will be up for grabs in a secondary offering limited to qualified institutional investors (QFIs).

Substantial shareholders are also selling down their positions to a 59.94% stake, down from 83.78%. They will not be able to execute any transaction on their shares for a period of 12 months from the first day of trading.

The IPO is primarily driven by the Derayah private equity (PE) fund divesting a large portion of its stake, likely to realize gains on its investment. As the largest selling shareholder, the fund is capitalizing on the market to exit its position, which is a common strategy for PE funds looking to monetize their holdings after a period of growth.

SOUND SMART- Typically, Nomu IPOs are structured to raise fresh capital that companies use to fund their working capital and drive business growth. Unlike this case, where the offering is largely a secondary sale, most Nomu listings involve primary share issuance to support future strategic initiatives.

Use of proceeds: Net proceeds from the sale will be disbursed to the selling shareholders, after deducting some SAR 2.6 mn to cover IPO-related expenses.

Timeline: A five-day subscription period will kick off on Sunday, 16 February, during which QFIs will be able to book up to 999.9k shares each, with the minimum limit set at 100 shares per investor. The final share allocation is slated for Tuesday, 25 February.

A snapshot of FY 2023 earnings: Ratio Specialty’s net income came in at SAR 12 mn in FY 2023, up from SAR 9.7 mn in 2022. The company’s revenue clocked in at SAR 43.4 mn over the same period, up from SAR 35.9 mn the previous year.

ADVISORS- Derayah Financial is quarterbacking the transaction as the lead manager, while Amwal Capital is acting as financial advisor with RSM and Moore providing legal counsel. Receiving agents include Alinma Investment, Al Rajhi Capital, SNB Capital, Saudi Fransi Capital, Riyad Capital, ANB Capital, Alistithmar Capital, Albilad Capital, AlJazira Capital, GIB Capital, Alkhabeer Capital, SAB Invest, Sahm Capital, and Yaqeen Financial.

About Ratio Speciality: The restaurant and coffeeshop operator was founded in 2014 in Al-Ahsa. It currently runs over 88 branches across 37 cities in the Kingdom, including prime locations in Riyadh, Jeddah, Makkah, and Madinah. In 2022, the company also launched Mornin, a local breakfast spot.

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