Red Sea acquires 51% of First Fix Company at SAR 544.17 million

Red Sea International Co. announced purchase 51% of the share capital of The Fundamental Installation for Electric Work Company Ltd. (First Fix) by means of cash consideration in the value of SAR 544.17 million.

The company stated on Monday on Tadawul that the transaction consideration will be paid as follows:

1. A sum of SAR 250 million (the “Initial Consideration”) shall be paid to the Sellers in cash in the proportions;

2. A sum of SAR 294.17 million (“Deferred Consideration”) will be settled within 4 months from the signing date subject to satisfaction of certain conditions precedent. Red Sea International will have the option to capitalize the debt represented by the Deferred Consideration. Any such transaction will be subject to applicable regulatory and corporate approvals.

The Acquisition Deal involves the following parties (Sellers)

A. MSB Holding Company, a limited liability company incorporated in the Kingdom of Saudi Arabia under Commercial Registration Number 4030293528 (“MSB Holding”);

B. Mr. Fares Esmat Al Saady; and

C. Mr. Ziad Jan Alsayegh

The company confirmed that the transaction will be funded through a bank loan.

The Fundamental Installation for Electric Work Company Ltd. (First Fix), a limited liability company organized and existing under the laws and regulations of the Kingdom of Saudi Arabia under Commercial Registration No. 4030279152 dated corresponding to December 3, 2014.

First Fix is a local construction firm since 2015 with more than 190 world class projects delivered through end to end solutions that offered integrated design, engineering and construction disciplines of mechanical, electrical & plumbing (MEP). With a human capital of over 8,000 employees across KSA, First Fix has operated as a leading contractor across the GCC and has over many years been a consistent performer financially and operationally. During 2022, First Fix reached its historic highest annual Revenues of SAR 1.49 billion with a Net profit of SAR 148 million. Apart from past performance, First Fix also has a strong financial forecast, backed by their project order backlog of SAR 3.4 billion which will be delivered during 2023 and beyond.

The audited financial statements for The Fundamental Installation for Electric Work Company Limited (First Fix) are not published as they are a private / limited liability company.

RSI will gain a critical stream of electromechanical and civil construction capability which are very crucial to every single client need. As an established brand in residential, industrial and commercial modular construction, this is a positive amalgamation with First Fix who share the same vision of providing comprehensive and excellent quality housing and building services while being conscious of sustainability and environmental concerns, locally and internationally.

The financial impact will be positive as RSI will buy 51% shareholding in The Fundamental Installation for Electric Work Company Limited (First Fix) which will make them a subsidiary of Red Sea International. Accordingly, the financial results of First Fix will be consolidated into Red Sea International’s financial statement upon completion of the transaction.

The company noted that completion of the Acquisition Deal will be subject to satisfaction of certain regulatory and corporate conditions, in addition to certain conditions which resulted from the due diligence exercises carried by Red Sea International over Fundamental Installation for Electric Work Company Ltd. (First Fix). The SPA includes customary fundamental, business and tax warranties granted to Red Sea International in connection with the business affairs of The Fundamental Installation for Electric Work Company Ltd. (First Fix).

The Fundamental Installation for Electric Work Company Ltd. (First Fix) will continue to be independently run and managed by its current executive and management team.