Modern Mills Sets Final IPO Price at SAR 48 per Share, Achieving SAR 3,928 Million Market Capitalization at Listing

Following the announcement by Modern Mills Company (the “Company”, or “Modern Mills”, or “MMC”), a national and leading milling and nutrition company and a key player in the Kingdom of Saudi Arabia’s food security landscape (the “Kingdom” or “Saudi Arabia”), on 15 February 2024G of the Offer price range, the Company along with HSBC Saudi Arabia, as Sole Financial Advisor, Global Coordinator, Joint Bookrunner and Underwriter and Lead Manager, and Emirates NBD Capital KSA as Joint Bookrunner and Underwriter, announces today the successful completion of the institutional book-building process in compliance with the rules and regulations issued by the Capital Market Authority (“CMA”) and the determination of the final offer price (the “Final Offer Price”) for the Initial Public Offering (the “IPO” or the “Offering”) at SAR 48 per share, implying a market capitalization of SAR 3,928 million (USD 1,047 million[1]) at listing.

The institutional book-building process generated an order book of approximately SAR 150 billion (USD 40 billion) and resulted in subscription coverage of approximately 127x of the total shares offered.

With regards to the offering, Moelis & Company Saudi Limited has been appointed as the Advisor to the Selling Shareholders.

Osama Ashi, CEO of MMC, said: “Today represents a milestone moment for our business as we successfully progress towards becoming a publicly traded company on the main market of the Saudi Exchange. Subscriptions were covered approximately 127 times and we are pricing at the top of the set range as a direct function of the robust institutional demand for MMC shares. This demand was driven by a renowned set of local, regional and global institutional investors that we had aspired to attract to our shareholder base and is testament to the soundness of our equity story, best-in-class operational model, strong financial position, and solid growth drivers. We will continue to drive growth through strengthening our market share across our three product categories, continued investment in people and technology, expanding our product portfolio, accessing new geographies, and profitably expanding into adjacent categories.

The success of this stage of the IPO reinforces our role in realizing Saudi Arabia’s vision of a self-sufficient, secure future in food production for generations to come and we look forward to matching this success among retail investors.”

Offering Details

• The Final Offer Price for the Offering has been set at SAR 48 per share, implying a market capitalization at listing of SAR 3,928 million (USD 1,047 million).
• The total Offering size is SAR 1,178 million (USD 314 million).
• The Offering is comprised of 24,549,600 ordinary shares (the “Offer Shares”) representing 30% of the Company’s share capital post-listing, to be sold by the current shareholders (the “Selling Shareholders”).
• Immediately following the listing on the Main Market of the Saudi Exchange (Tadawul), the Company is expected to have a free float of 30% (24,549,600) of its entire issued share capital (81,832,000).
• The Selling Shareholders are Mada International Holding Company (50% share pre-Offering), Al Ghurair Foods Company (45% share pre-Offering), and Masafi Company (5% share pre-Offering). Following the completion of the Offering, the current shareholders shall collectively own 69% of the Company’s share capital.
• The Company will hold 818,320 treasury shares (equivalent to 1% of Company’s capital) after the Offering through buying 687,389 shares (representing 84% of treasury shares) based on the final Offer Price and the award of 130,931 shares (representing 16% of treasury shares) by the Selling Shareholders, in conjunction with completing the Offering process to use them within the Company’s employee stock program.
• 100% of the Offer Shares have been provisionally allocated to the Participating Parties that took part in the book-building process (“Participating Parties”). This may be reduced to 22,094,640 Offer Shares (representing 90% of the total Offer Shares) depending on the level of demand by Individual Investors (as defined below). The final number of Offer Shares allocated to the Participating Parties will be clawed-back accordingly based on subscriptions from Individual Investors.
• Individual Investors are defined as Saudi Arabian nationals, including any Saudi female divorcee or widow with minor children from a marriage to a non-Saudi person who can subscribe in her own name or in the names of her minor children, on the condition that she proves that she is a divorcee or widow and the mother of her minor children; and any non-Saudi Arabian national who is residing in Saudi Arabia and any national of countries in the Gulf Cooperation Council (the “GCC”), in each case who has a bank account with a Receiving Agent and has the right to open an investment account with a capital market institution (collectively, the “Individual Investors“, and each an “Individual Investor“).
• Individual Investors will be able to subscribe for shares in the retail offering between 05 – 06 March 2024G (corresponding to 24 Shabaan 1445H – 25 Shabaan 1445H[2]) at the Final Offer Price of SAR 48 per Offer Share through AlRajhi Bank and Saudi National Bank which have been appointed as Receiving Agents (collectively, the “Receiving Agents”).

• The offer to Individual Investors will be made as follows:

  • Each Individual Investor must submit a Subscription Application Form. Changes to or withdrawal of the Individual Subscription Application Form shall not be permitted once submitted.

  • Subscription Application Forms will be made available during the Offering Period on the websites of the Receiving Agents. Investors can also subscribe through the internet, telephone banking or ATMs of any of the Receiving Agents that offer any or all such services to its customers, provided that the following requirements are satisfied:

    • The Individual Investor must have a bank account at a Receiving Agent which offers such services.
    • There have been no changes to the personal information or data of the Individual Investor since his subscription in a recent Offering.
  • Upon signing and submitting the Individual Investor Application Form to any of the Receiving Agents, it shall be deemed a legally binding agreement between the Selling Shareholders and the relevant Individual Investor.

Expected Offering Timeline