Entaj issues prospectus for Tadawul IPO

Riyadh-based poultry producer Arabian Company for Agricultural & IndustrialInvestments (Entaj Foods) is taking a 30% stake to Tadawul in a secondary offering, with 9 mn shares up for grabs, according to its prospectus (pdf). The company lined up the Capital Market Authority’s approval for the main market IPO back in October 2024.

Who is selling? The sale will see Arabian Agriculture Services (Arasco), Entaj's sole owner, reduce its direct ownership in the company to 65.1%, down from 95.10%, thereby locking in the sale’s net proceeds. Meanwhile, its indirect 4.9% stake in the company, which it holds through its fully-owned subsidiary Ocean Line Marine Services, will remain intact.

A two-tranche offering: The IPO will initially be limited to institutional investors, including investment funds, companies, qualified foreign investors, GCC corporate investors, and some foreign investors under swap agreements. Following that, retail investors will be able to subscribe to 10% of the offering, provided there is sufficient demand.

Subscription limits: Institutional investors have a minimum subscription limit of 100k shares, and a maximum of about 1.5 mn shares, while a retail investor can subscribe to anywhere between 10 and 250k shares.

IPO timeline: A five-day institutional book building period will kick off on Sunday, 9 February, where institutional investors will have until Tuesday, 25 February to book orders, with the payment deadline slated for Wednesday, 26 February. For retail investors, a two-day subscription window will open on Wednesday, 26 February. The final allocation of shares is slated for Tuesday, 4 March.

Financials + performance: Entaj logged SAR 22 mn in net income in 1Q 2024, up from SAR 16.1 mn y-o-y. Its revenue came in at SAR 339.6 mn in 1Q 2024, up from SAR 280.7 mn in the same quarter a year earlier.

ADVISORS- SNB Capital is quarterbacking the transaction as lead manager and financial advisor, with STAT Law Firm providing counsel. SNB tapped White & Case to be its counsel. Meanwhile, PwC serves as financial due diligence advisor, Euromonitor International acts as market consultant, and EY as auditor.

Receiving agents include Derayah Financial, Alinma Investment, Al Rajhi Capital, SNB Capital, Riyad Capital, Albilad Capital, ANB Capital, Alisthimar Capital, AlJazira Capital, GIB Capital, Alkhabeer Capital, SAB Invest, Sahm Capital, Saudi Fransi Capital, and Yaqeen Capital.

About Entaj: Entaj was founded in 2011 as the commercial and investment arm of Arasco before Arasco separated its entire poultry operations, including the Entaj brand, to be a dedicated poultry subsidiary. The company’s operations include broiler chicken production and fresh and frozen poultry products distribution, with the company providing its services across the Kingdom and the wider GCC market. The company has also expanded into table eggs, red meat products, and cold storage leasing services.