Fourth Milling to raise up to $229m from Saudi listing

Fourth Milling Company (MC4) has set the price range for its initial public offering (IPO) between SAR5 and SAR5.30 ($1.33-$1.41) per share.

The total offering size is expected to be between SAR810 million and SAR858.6 million, indicating a market capitalisation at listing of between SAR2.7 billion and SAR2.8 billion.

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

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The institutional book building started on Sunday and will close on September 19.

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

Gulf Milling Industrial Company, the current shareholder, will own 70 percent of the company’s share capital following the completion of the IPO.

The two-day retail tranche will begin on October 2, with the final offering price to be announced on September 25.

A date has not yet been finalised for the listing on the Saudi bourse.

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In 2021, MC4 was sold to a consortium comprising Al Othaim Markets, Allana International and United Feed Manufacturing Company for SAR859 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.

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.