BinDawood Holding subsidiary inks MoU to buy 62% stake in International Applications

BinDawood Holding building

BinDawood Holding Co. announced that its fully-owned subsidiary, Future Tech Retail, signed a non-binding memorandum of understanding (MoU) with Amwaj Real Estate Co. Ltd. and First Commercial Application Co. to acquire 62% of the shares in International Applications Trading Co. (IATC).

The company said in a bourse statement that the MoU was signed on Feb. 10 and is effective for 180 days from the date of signing and may be extended upon the approval of all parties.

The major terms of the MoU include conducting due diligence and reviewing the valuation already prepared by a leading global accounting, auditing, and valuation firm with a view to determining the purchase consideration for the potential acquisition.

IATC develops and operates the Danube Online e-commerce platform and online mobile applications of Danube and BinDawood brands in addition to the provision and management of services relating to the online platform and mobile applications.

The potential acquisition is strongly aligned with BinDawood’s objectives to enhance its position in e-commerce and to strengthen its omnichannel presence. It is expected to be highly value accretive financially to the company and its shareholders if it succeeds.

No financial adviser was appointed; however, a leading global audit, accounting and valuation firm and a leading law firm have been appointed to conduct the financial and legal due diligence on behalf of BinDawood.

There are related parties in the contract as 42% of IATC is owned directly by Amwaj Real Estate (a related party of BinDawood), while 20% is held by First Commercial Application (in which Abdulrazzag Dawood Ibrahim BinDawood is holding 50% of the capital).

Abdulrazzag BinDawood, who is an indirect shareholder of BinDawood and Chairman of the Board, is also the Chairman of the Board in IATC.

IATC is a related party of BinDawood on the basis that Abdulrazzag BinDawood, Abdulkhaliq Dawood Ibrahim BinDawood, Khalid Dawood Ibrahim BinDawood, Tariq Abdullah BinDawood and Ahmad Abdulrazzaq BinDawood (who are board directors of BinDawood) have an indirect ownership interest in IATC. Additionally, Ahmad Abdulrazzaq BinDawood is a board member of BinDawood and IATC.

If the parties agree, the transaction’s documentation will be signed and approvals from relevant bodies will be applied for.

Any binding agreement in relation to the proposed acquisition will be subject to the approval of the audit committee (since it involves related parties), BinDawood’s board of directors, excluding those who have a financial interest in the transaction, and the approvals of other relevant authorities.

The board members of BinDawood (independent and non-executives excluding the related parties) are supervising the potential acquisition.

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