Marketing Home Group is taking a 30% stake to the main market

Marketing Home Group issues IPO prospectus: Marketing Home Group (MHG), the brand operator of Ceramic Home, is taking a 30% stake — good for 4.8 mn shares — to Tadawul’s main market via a secondary offering, according to its prospectus (pdf). This comes a little over four months after the Riyadh-based building materials retailer and distributor lined up the Capital Market Authority’s (CMA) approval for the move.

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Big money goes in first: Initially, 100% of the IPO will be offered to institutional investors, including 30% reserved for public funds. They will be able to book a maximum of c. 800k and a minimum of 50k shares each between 3-7 August.

Retail investors will have a 20% clawback to subscribe to the IPO between 19-20 August, provided there is sufficient demand, where they will be able to book between 10 and 250k shares each. Final allocations will be made on Sunday, 24 August.

Sellers will keep holding the reins: MHG’s three major shareholders will retain 57.5% of the company post-IPO, down from 82.2%. They will also rake in net proceeds from the sale after some SAR 21 mn are set aside to cover transaction-related expenses. Their shares will be subject to a six-month lockup period from the first day of trading.

A snapshot of its financial performance: The company posted SAR 282.3 mn in revenue last year, up 6.1% y-o-y from SAR 266.1 mn in 2023. Meanwhile, net income was down 30% y-o-y at SAR 40 mn over the same period, weighed down by a faster rise in operating expenses and cost of sales.

About MHG: Founded in 2006, the Riyadh-based company boasts a portfolio of subsidiaries, including MHG International, Illus Lighting Limited, AlQafari Engineering Consultancy, Build Station, and Ice Bear Contracting, with operations extending beyond Saudi Arabia to Spain, China, the UAE, Kuwait, Oman, Bahrain, and Egypt, according to its website.

IN CONTEXT- The move comes as Tadawul’s benchmark index TASI regains footing after closing 1H in the red, where it shed 7.2%. While the index hasn’t fully recovered YTD, it has stabilized around the 11k mark, with recent issuances, including a pickup in listing activity, pointing to gradual improvement in sentiment. For sellers, that opens a more favorable window to monetize stakes as demand returns to large-cap and mid-cap names.

ADVISORS- Alinma Capital is quarterbacking the transaction as financial advisor, lead manager, bookrunner and underwriter, with Stat Law Firm providing counsel. PwC Public Accountants is acting as financial due diligence advisor, while Euromonitor International is serving as market consultant.

Receiving agents include our friends at EFG Hermes KSA, Alrajhi Capital, SNB Capital, Saudi Fransi Capital, Riyad Capital, AlBilad Investment, AlJazira Capital, Derayah Financial, ANB Capital, Yaqeen Capital, and Al Khabeer Capital, among others.