SISCO BOD Approves Acquiring 31.7% Share in Green Dome for SR44.5 mln

Saudi Industrial Services Company (“SISCO”) announced on Monday that its Board of Directors has approved the acquisition of a 31.7% direct equity stake in Green Dome Investments LLC (“Green Dome”) through a share ownership transfer from its subsidiary Saudi Trade & Export Development Company (“LogiPoint”), a related party, for a total net consideration of SR44.5 million.

The acquisition is subject to shareholder approval at SISCO’s Annual General Meeting (“AGM”). The date of the upcoming General Assembly Meeting will be announced in due course.

LogiPoint Corporation is a related party as a 76%-owned subsidiary of SISCO, LogiPoint is a related party.

Description of the Business of the Asset forming the Subject Matter of the Transaction: Headquartered in Dubai, UAE, Green Dome is a logistics investment fund that invests in profitable, well-managed companies that have a demonstrable track record of success, with a focus on companies that will benefit from demand for integrated logistics in the wider GCC region.

On 25 November 2021, Green Dome acquired 100% of the share capital of Elite Logistics LLC (“Elite”), to which LogiPoint, as a 31.7% shareholder in Green Dome, made an initial capital contribution of SR58 million.

Following the completion of the acquisition, based on the financial strength and strong prospects of Elite, Green Dome was able to secure acquisition debt finance of SR42.5 million thus reducing the equity contribution required from Green Dome’s shareholders by SR42.5 million.

As a result, Green Dome reimbursed SR42.5 million, of which LogiPoint received SR13.5 million, representing its 31.7% shareholding in Green Dome.

These results in a net capital contribution paid by LogiPoint of SR 44.5 million which is effectively the consideration SISCO will pay to LogiPoint to acquire 31.7% of Green Dome.

Transaction reasons:

Green Dome’s strategy is based on a buy-and-build model that creates economies of scale in the logistics services market. As such, its logistics solutions strategy is well-aligned to SISCO’s strategy for the logistics vertical in its portfolio, as it transitions to offer a more diverse range of logistics services to customers.

SISCO’s management and Board therefore believe that Green Dome will deliver synergies with SISCO and its portfolio and that there is a compelling rationale for the company to be integrated directly into the Group’s portfolio, where these synergies can be realised.

Meanwhile, SISCO’s subsidiary LogiPoint will continue to focus on expanding its presence and core offering across the Kingdom as a leading logistics real estate developer and operator.

The transaction is announced as SISCO continues to make good progress on the implementation of its recently updated five-year strategy for growth, which aims to leverage existing capabilities in its core segments to invest in assets with a significant opportunity to be scaled-up and accelerate the returns timeline for SISCO and its shareholders.

In addition to the above transaction, key milestones during the last twelve months, in support of delivering on the strategy, have included the part divestment of the Group’s direct equity stake in the Red Sea Gateway Terminal Company (“RSGT”); expansion by subsidiary LogiPoint; and important independent sewage water treatment plant contract awards in the water solutions segment.

Expected Impact of the Transaction on the Company and Its Operations:

The financial impact of the transaction will be realized in SISCO’s Q2 2022 financial statements, which will be disclosed to the market in due course. Green Dome will be equity accounted in SISCO’s financial statements.

Related Parties:

Saudi Trade & Export Development Company (“LogiPoint”) – Subsidiary