SMASCO announces IPO offer price range and the start of institutional book-building process

SAUDI MANPOWER SOLUTIONS COMPANY (“SMASCO” or the “Company” or the “Group”) the leading manpower solutions company in the Kingdom of Saudi Arabia (the “Kingdom”), announces the price range for its initial public offering (the “IPO” or “Offering”) and the commencement of the institutional book-building period for Participating Parties.

The price range for the Offering has been set between SAR 7 and SAR 7.50 per share (the “Price Range”). The institutional bookbuilding period commences today, 8 May 2024G and will close at 5:00 PM KSA time on Tuesday 14 May 2024.

On 11 March 2024, the Capital Market Authority (the “CMA”) approved the Company’s application for registering its share capital and the Offering of 120,000,000 ordinary Shares (the “Offer Shares”), representing 30% of the Company’s total issued share capital, and the offering price will be announced following the end of the institutional bookbuilding period.

The Offering’s net proceeds will be distributed to the selling shareholders. The Company will not receive any part of the proceeds from the Offering.

The final price at which all subscribers in the Offering will purchase Shares will be determined at the end of the book-building period.

OFFERING DETAILS

The Offer Shares will be listed and traded on the Saudi Exchange’s Main Market following the completion of the Offering and listing formalities with both the CMA and the Saudi Exchange.

• The price range of the Offering has been set between SAR 7 and SAR 7.50 per share.
• The Offering will consist of a secondary offering of 120,000,000 Offer Shares representing 30% of the Company’s total issued share capital.
• The total offering size is expected to be between SAR 840 million (USD 224 million) and SAR 900 million (USD 240 million), indicating a market capitalization at listing between SAR 2.8 billion (USD 747 million) and SAR 3 billion (USD 800 million).
• The Offer Shares will be offered for subscription to Individual Subscribers and Participating Parties (as defined below).
• Following completion of the Offering, the current shareholders (the “Current Shareholders”) shall collectively own 70% of the Company’s share capital. The Current Shareholders owning 5% or more Shares in the Company are as follows:

• A maximum of 120,000,000 shares, representing 100% of total Offer Shares will be allocated to Participating Parties.
• The Financial Advisor may, in coordination with the Company, reduce the number of shares allocated to Participating Parties to 108,000,000 shares, representing 90% of total Offer Shares to accommodate Individual Subscriber demand.
• A maximum of 12,000,000 shares, representing 10% of the total Offer Shares, will be allocated to Individual Subscribers.
• Following listing, the Company is expected to have a free float of 30% of the Shares.
• SNB Capital Company has been appointed as the Financial Advisor, Lead Manager, Bookrunner, and Underwriter.
• Saudi National Bank, Alrajhi Bank and SNB Capital Company have been appointed as receiving agents (collectively, the “Receiving Agents”) for retail investors.

Please refer to the Prospectus for details on the expected timetable of the Offering.

The Offering is restricted to the following two groups of investors:

Tranche (A): Participating Parties – Comprising the parties entitled to participate in the book-building process as specified under the Instructions for Book-Building Process and Allocation Method in Initial Public Offerings, issued pursuant to CMA Board Resolution No. 2-94-2016, dated 15 Shawwal 1437H (corresponding to 20 July 2016G), as amended, including investment funds, companies, qualified foreign investors, GCC corporate investors and certain other foreign investors pursuant to swap agreements) (collectively referred to as the “Participating Parties” and each a “Participating Party”). The number of Offer Shares to be provisionally allocated to the Participating Parties is one hundred and twenty million (120,000,000) Offer Shares, representing one hundred per cent (100%) of the Offer Shares. The final allocation will be made after the end of the Individual Subscribers’ subscription (as defined in Tranche (B) below), using the discretionary allocation mechanism by the Financial Advisor in coordination with the Company. The Financial Advisor shall have the right, if there is sufficient demand by Individual Subscribers and in coordination with the Company, to reduce the number of Offer Shares allocated to Participating Entities to one hundred and eight million (108,000,000) Offer Shares, representing ninety per cent (90%) of the Offer Shares.

Tranche (B): Individual subscribers – Comprising Saudi Arabian natural persons, including any Saudi female divorcee or widow with minor children from a marriage to a non-Saudi person who can subscribe for her own benefit 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 Saudi Arabian children, as well as any non-Saudi natural persons resident in the Kingdom or GCC natural persons, in each case who have a bank account with a Receiving Agent and the right to open an investment account with a capital market institution or those who have an active portfolio with SNB Capital Company in the event of subscription through SNB Capital Company (the “Individual Subscribers” and each an “Individual Subscriber”). A subscription for Offer Shares made by a person in the name of his divorced wife shall be deemed invalid and the applicant shall be subject to the sanctions prescribed by law. If a duplicate subscription is made, the second subscription will be considered void and only the first subscription will be accepted. A maximum of twelve million (12,000,000) Offer Shares representing ten per cent (10%) of the total Offer Shares shall be allocated to Individual Subscribers. If the Individual Subscribers do not subscribe in full to the Offer Shares allocated to them, the Financial Advisor may in coordination with the Company reduce the number of Offer Shares allocated to Individual Subscribers in proportion to the number of Offer Shares subscribed by them.

OFFERING TIMETABLE