Fourth Milling to launch retail IPO next month

Reuters/Faisal Al Nasser

The two-day retail tranche of the Fourth Milling Company’s (MC4) initial public offering (IPO) will begin on October 2.

The company will sell 162 million shares, or 30 percent of its share capital, on the Saudi stock exchange, it said in its prospectus.

The price range announcement and institutional book building will commence on September 15. The final offering price will be announced on September 25.

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Share allocation process will be completed on October 6. However, no date has been finalised for the listing on the stock exchange.

The flour producer will not receive any part of the proceeds from the offering, which will be distributed to the selling shareholders.

In 2021, MC4 was sold to a consortium comprising Al Othaim Markets, Allana International and United Feed Manufacturing Company for SAR859 million ($229 million) under the kingdom’s privatisation programme.

The company’s revenues have grown at a compound annual growth rate (CAGR) of nearly 30 percent from SAR336 million in 2021 to SAR566 million in 2023. Net income margin has risen from 15 percent in 2021 to 25 percent in 2023.

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MC4 operates factories in Riyadh, Medina and the Eastern Region, producing flour, feed, bran and diverse wheat derivatives. It has a daily milling capacity of 3,150 metric tonnes of wheat grains and 450 tonnes of animal feed.

The milling industry is crucial for Saudi Arabia’s food security agenda as it ensures the availability of flour, a staple ingredient in the local diet, according to the prospectus.

Flour consumption in the kingdom is expected to increase at a CAGR of 3.2 percent to 4.1 million tonnes by 2028.

The First Mills Company was privatised in Saudi Arabia in 2020 when it was sold to AlRaha AlSafi Food Company-consortium for $540 million.