{"id":86278,"date":"2024-05-19T00:00:00","date_gmt":"2024-05-19T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/05\/19\/aluminum-products-maker-talco-the-latest-to-join-in-the-ipo-boom\/"},"modified":"2024-05-19T00:00:00","modified_gmt":"2024-05-19T00:00:00","slug":"aluminum-products-maker-talco-the-latest-to-join-in-the-ipo-boom","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/05\/19\/aluminum-products-maker-talco-the-latest-to-join-in-the-ipo-boom\/","title":{"rendered":"Aluminum products maker Talco the latest to join in the IPO boom"},"content":{"rendered":"

Riyadh-based aluminum products maker Al Taiseer Group Talco Industrial <\/strong>(Talco) plans to <\/strong>take a <\/strong>30% stake <\/strong>to Tadawul\u2019s<\/strong> main market through a secondary share sale, <\/strong>it said in a prospectus (pdf)<\/a>. It is looking to sell 12 mn ordinary shares on the main market. The sale comes months after it lined up the Capital Market Authority\u2019s approval in December<\/a>.<\/p>\n

The details:<\/strong> Institutional investors will be able to place orders for 100% of the offering\u2019s shares, while the financial advisor has the right to allocate 10% of the offering to retail investors \u201cif there is sufficient demand.\u201d Each institutional investor can subscribe to up to 1.99 mn shares and a minimum of 50k shares, while each individual investor can subscribe to a maximum of 250k shares and a minimum of 10 shares.<\/p>\n

About Talco: <\/strong>Founded in 1976, Talco makes and sells aluminum products, thermoset powder coating, and related accessories, according to the prospectus. Its products include powder coated aluminum, wood-finished aluminum, polyester powder, metallic powder, plastic bags and sheets and printing wrapping films.<\/p>\n

The pitch: <\/strong>Talco is a leader in the industry, with a footprint in 26 countries across the GCC, MENA region and East Asia, Europe, US, and Australia. Several expansions throughout the years helped bring its aluminum production capacity to 60k MT as of June 2023. It currently operates two factories in Riyadh and one in Jeddah.<\/p>\n

A snapshot of its financial performance: <\/strong>Talco\u2019s net income grew 17.7% y-o-y to SAR 39.8 mn in 1H 2023 despite revenues falling 10.9% y-o-y to SAR 336.6 mn over the same period on lower aluminum prices. Still, aluminum products accounted for 87% of Talco\u2019s total revenues in the first half of last year. <\/p>\n

Post-IPO structure + lock-up period: <\/strong>Talco\u2019s nine substantial shareholders are selling down their positions to a combined 65.09% stake from 92.99%. They will not be able to execute any transactions on their shares for a period of six months starting the first trading day. <\/p>\n

Use of proceeds:<\/strong> Talco\u2019s selling shareholders will take the transaction\u2019s proceeds home after covering transaction related-expenses \u2014 estimated at SAR 16 mn. All the proceeds will be divided between the selling shareholders on a pro rata basis.<\/p>\n

The IPO timeline:<\/strong> Bankers will take orders from institutional investors starting tomorrow until Thursday, 23 May, while the bookbuilding process for retail investors will run on Tuesday, 28 May to Wednesday, 29 May. A final allocation of shares is slated for Sunday, 2 June, with any excess subscription fees refunded on the same day. The first day of trading remains contingent on fulfilling regulatory requirements, according to the prospectus.<\/p>\n

ADVISORS- Alinma Investment <\/strong>is quarterbacking the transaction as financial advisor, lead manager, bookrunner and underwriter, while Stat Law Firm<\/strong> is acting as legal advisor. PwC<\/strong> is Talco\u2019s financial due diligence advisor. Front & Sullivan<\/strong> is serving as market consultant, while KPMG<\/strong> is acting as the company\u2019s auditor. The receiving agents are Alinma Bank<\/strong>, Al Rajhi Bank<\/strong>, and Riyad Bank<\/strong>. <\/p>\n

POULTRY PRODUCER ENTAJ INCHES CLOSER<\/p>\n

Halal poultry producer Arasco Foods (Entaj) <\/strong>is seeking a listing on Tadawul\u2019s main <\/strong>market after \u201creaching the final stages of submitting the IPO application<\/strong>,\u201d <\/strong>Ziyad Alsheikh, CEO of parent company Arab Agricultural Services (Arasco), told Argaam<\/a>. Alsheikh said Entaj has been working extensively on the IPO since last year, expecting the offering somewhere between the end of this year or early 2025 depending on regulatory approvals, he said.<\/p>\n

About the company: <\/strong>Entaj says it is one of the fastest chicken producers in the Kingdom with a poultry processing capacity of 600k birds per day, according to its website<\/a>. Its range of products include a variety of fresh, frozen, raw and pre-fried chicken options.<\/p>\n

SAUDI IPO PIPELINE AT A GLANCE-<\/p>\n

Among the transactions now in the market or expected soon:<\/strong><\/p>\n