Sign in
Bookbuilding for Modern Mills Company (MMC)’s IPO began on Thursday with the flour milling company setting a price range of SAR 44-48 per share for the sale, it said in a regulatory filing (pdf).
Demand for the IPO was strong: The order book was fully covered only hours after the start of the process, Bloomberg reports. Modern Mills, previously known as Milling Company 3, received earlier this month approval from the Capital Market Authority (CMA) for the offering, which is open to both institutional and individual investors.
The timeline for the transaction:
- Bookbuilding for institutional investors to run until Wednesday, 21 February;
- Final price announced on Tuesday, 27 February;
- Subscription period for individual investors from Tuesday, 5 March to Wednesday, 6 March.
MMC is looking to raise SAR 1.08 bn to SAR 1.178 bn from the offering, which will see it sell 30% of the company. The price range will see it have a market cap on the first day of trading in the SAR 3.6-3.9 bn range
This is a secondary sale: Selling shareholders will own a combined 69% of Modern Mills after the transaction. They include Mada International Holding (50% share pre-offering), Al Ghurair Foods Company (45% share pre-offering), and Masafi Company (5% share pre-offering).
MMC is one of two companies with an IPO in the market right now. Drugmaker Avalon Pharma priced its IPO at the top range as it looks to raise SAR 492 mn for a 30% stake.
All part of a wave of privatization + IPO bonanza for the milling firms: MC3 is among one of several state-owned flour milling firms that were sold to the private sector by the government in recent years under its privatization scheme for the industry. It was sold to a consortium of investors for SAR 750 mn in 2020. Since then, the milling firms have sought share sales, with First Milling going public in May with a USD 266 mn IPO.
ADVISORS- HSBC Saudi Arabia is quarterbacking the transaction as sole financial advisor, joint bookrunner, underwriter and lead manager alongside Emirates NBD Capital KSA. Moelis & Company Saudi will act as advisor to selling shareholders, while Al Rajhi Bank and SNB are receiving agents for individual investors.
More to come? The Fourth Milling Company (MC4) has recently tapped Riyadh Capital as its financial advisor for an IPO in Tadawul, Bloomberg reported in January, with sources saying that the offering could happen in the first half of this year.
