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This $763-million IPO got sold out within an hour
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Dr. Soliman Abdul Kader Fakeeh Hospital and its shareholders are seeking to raise as much as 2.86 billion riyals ($763.4 million) in the Riyadh initial public offering.
Investors snapped up all shares on offer in a Saudi hospital group shortly after books opened on the deal that’s shaping up to be the largest listing in the kingdom so far this year.
Dr. Soliman Abdul Kader Fakeeh Hospital and its shareholders are seeking to raise as much as 2.86 billion riyals ($763.4 million) in the Riyadh initial public offering. Books were covered throughout the price range of 53 riyals to 57.5 riyals per share, according to terms of the deal seen by Bloomberg News.
Abu Dhabi Investment Authority committed to buying 1.04 million shares in the deal, according to a statement, marking the first instance of the wealth fund participating in a Saudi IPO as a cornerstone investor, Olayan Saudi Investment Co.—the other cornerstone investor—will buy 1.95 million shares. The two funds will subscribe for a total of 173 million riyals.
The company is selling 30 million new shares and the founding family will offer 19.8 million shares in the IPO. The top end of the range implies a market capitalization of 13.3 billion riyals.
Bookbuilding for institutional investors runs until May 8, while the retail offering opens on May 21 for two days. The final price is expected to be announced on May 14.
IPO pipeline
Fakeeh Care Group is among three Saudi companies that have announced their intentions to go public in the last few weeks. The kingdom’s listings market has picked up despite a flaring up of tensions in the Middle East last month after Israel and Iran openly struck each other for the first time.
Water treatment firm Miahona Co. closes institutional order books for its IPO of as much as 555.2 million riyals on Thursday, while Saudi Manpower Solutions Co. announced its listing plans earlier this week.
Just under $697 million has been raised through Saudi IPOs so far this year, with the largest share sale being the $314 million listing of Modern Mills Co. in March. It’s still a large year-on-year increase after the kingdom’s IPOs ground to a halt in the first half of 2023 because of a decline in its stock market.
Financing growth
Fakeeh Care Group was founded in 1978 in Jeddah, and now has 835 beds across four hospitals and five medical centers. It plans to expand to seven hospitals with 1,675 beds and nine medical centers by 2028 to capitalize on the kingdom’s growing population, which is expected to hit about 40 million by 2030. The company plans to use the proceeds from the sale of new shares to finance its growth strategy.
The group reported 2023 revenue of 2.3 billion riyals, up from 1.7 billion riyals in 2020. Its profit for last year was 232 million riyals.
HSBC Holdings Plc is acting as sole financial adviser and joint bookrunner together with anb capital and EFG Hermes. Moelis & Co. is advising the selling shareholders.
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