Specialized Medical Company to float a 30% stake on Tadawul

SMC inches closer to Tadawul IPO: Private healthcare provider Specialized Medical Company (SMC) is taking a 30% stake to Tadawul’s main market in a secondary share sale, whereby selling shareholders will rake in all of the proceeds, according to the prospectus (pdf). The move comes one month after the company lined up the Capital Market Authority’s (CMA) approval.

A two-tranche offering: Some 75 mn ordinary shares will be up for grabs in an offering open to both institutional and retail investors. Initially, 100% of the IPO will be limited to institutions, with a 20% clawback for retail investors provided there is sufficient demand.

Books open next week: Institutional bookbuilding is set to run between 11-15 May, during which institutions can book up to 12.5 mn shares each, with the minimum limit set at 100k. A two-day retail subscription window will open on Wednesday, 28 May. The final allocation is slated for Wednesday, 4 June.

Shareholders keep reins + returns: SMC’s four substantial shareholders will retain majority ownership even as they sell down their position to a combined 66% stake, down from 94.2%. They will also take home all of the proceeds from the sale, after deducting SAR 41 mn to cover IPO-related expenses.

A snapshot of its latest earnings + dividends: SMC’s bottom line grew 45% y-o-y to SAR 159 mn in 9M 2024, while its top line rose 11.9% to SAR 1.1 bn. SMC has been handing out healthy payouts, with SAR 100 mn in dividends declared for 9M 2024 — a 62.9% payout ratio.

About SMC: Founded in 1999, the Riyadh-based healthcare provider operates two hospitals and over 250 outpatient clinics, with plans to open three hospitals by 2029, expanding its bed capacity to roughly 1.3k from 600.

ADVISORS- Our friends at EFG Hermes are quarterbacking the transaction as joint financial advisors, underwriters, and bookrunners, alongside SNB Capital. SNB Capital is also serving as lead manager with White & Case providing counsel to the issuer. Receiving agents include Al Rajhi Capital, BSF Capital, Alinma Investment, and Riyad Capital, among others.

ALSO IN THE PIPELINE-

The PIF’s Saudi Global Ports tapped banks including Goldman Sachs and HSBC to arrange an upcoming IPO;
PIF-backed Tabreed District Cooling reportedly hired Citigroup and SNB Capital to manage a potential IPO;
Medical procurement firm Nupco — a unit of the PIF — tapped Rothschild & Co as financial advisor for its potential IPO;
Budget airline Flynas is reportedly looking to go public this year;
BNPL platform Tabby plans to IPO during the 2025-2026 window;
Local tech services firm Ejada Systems secured approval from the CMA to take a 45% stake to market;
Marketing Home Group got the thumbs up from the CMA to go public with a 30% stake;
Sport Clubs Company received the CMA’s approval to debut a 30% stake on Tadawul;
Ejada Systems also lined up approval from the capital markets watchdog to float a 45% stake on Tadawul.