Saudi’s first privatised mill to offer 30% stake in IPO

Reuters/Viacheslav Musiienko

First Milling Company, the first mill to be privatised in Saudi Arabia, is planning to launch an initial public offering (IPO) on the Saudi Exchange (Tadawul).

The company will offload 16.65 million shares, resulting in a free float of 30 percent of the flour milling company’s share capital, it said in an IPO document.

The final price of the offering will be determined at the end of a book-building period. No dates were given when the book-building process will begin.

First Milling has a daily wheat milling capacity of 4,200 tonnes and a feed mixing capacity of 900 tonnes. It operates four large-capacity production facilities in Makkah, Al Qassim, Tabuk and the Eastern Region.

The document said the company’s market share stood at 33.8 percent in 2021.

“We have a clear and focused strategy that will allow us to boost our market share and capture the strong potential growth in the market. This includes building scale and capacities, enhancing operational and financial efficiencies, expanding into new product categories, improving distribution and sales channels, and sustainably growing revenue and profit,” said CEO Abdullah Ababtain.

SNB Capital Company was named the financial advisor, lead manager, and bookrunner. SNB Capital and GIB Capital were named the underwriters.

First Mills’s total sales reached SAR 801 million ($213.60 million) in 2021, as the three-year compound annual growth rate hit 11.5 percent.

In the first nine months of 2022, the company achieved sales of SAR 687 million. Gross profit reached SAR 310 million and net income reached SAR 197 million during the period.

First Mills was the first of several flour milling privatisations in Saudi Arabia, sold to AlRaha AlSafi Food Company-consortium for $540 million in 2020.

The consortium was led by Saudi Arabian firm Almutlaq Group, including AlSafi Holding Company, Abunayyan Holding and UAE’s Essa Al-Ghurair Investment.