SISCO board approves acquisition of 31.7% stake in Green Dome for SAR 44.5 mln

Logo of Saudi Industrial Services Co.

Saudi Industrial Services Co.’s (SISCO) board of directors approved the acquisition of a 31.7% direct equity stake in Green Dome Investments LLC (Green Dome) through a share ownership transfer from its subsidiary, Saudi Trade & Export Development Co. (LogiPoint), a related party, for SAR 44.5 million, according to a bourse filing today, March 21.

The acquisition is subject to shareholder approval at SISCO’s annual general meeting. The date of the upcoming meeting will be announced in due course.

LogiPoint is a 76%-owned subsidiary of SISCO.

Headquartered in Dubai, UAE, Green Dome is a logistics investment fund that invests in profitable, well-managed companies with a track record of success, focusing on companies that will benefit from demand for integrated logistics in the wider GCC region.

On Nov. 25, 2021, Green Dome acquired 100% of the share capital of Elite Logistics LLC (Elite), to which LogiPoint, as a 31.7% shareholder in Green Dome, made an initial capital contribution of SAR 58 million.

Following the completion of the acquisition, based on the financial strength and strong prospects of Elite, Green Dome was able to secure acquisition debt finance of SAR 42.5 million, thus reducing the equity contribution required from Green Dome’s shareholders by SAR 42.5 million.

As a result, Green Dome reimbursed SAR 42.5 million, of which LogiPoint received SAR 13.5 million, representing its 31.7% shareholding in Green Dome. This resulted in a net capital contribution paid by LogiPoint of SAR 44.5 million, which is effectively the consideration SISCO will pay to LogiPoint to acquire 31.7% of Green Dome.

Green Dome’s strategy is based on a buy-and-build model that creates economies of scale in the logistics services market. Its logistics solutions strategy is well-aligned to SISCO’s strategy for the logistics vertical in its portfolio.

SISCO’s board believes that Green Dome will deliver synergies with SISCO and its portfolio. Hence, there is a compelling rationale for the company to be integrated directly into the group’s portfolio, as these synergies can be realized.

Meanwhile, SISCO’s subsidiary LogiPoint will continue to focus on expanding its presence and core offering across the Kingdom as a leading logistics real estate developer and operator.

The transaction is announced as SISCO continues to make good progress on implementing its recently updated five-year strategy for growth, which aims to leverage existing capabilities in its core segments to invest in assets with a significant opportunity to be scaled-up and accelerate the returns timeline for SISCO and its shareholders.

In addition to the above transaction, key milestones during the last 12 months have included the part divestment of the group’s direct equity stake in the Red Sea Gateway Terminal Co. (RSGT); expansion by subsidiary LogiPoint, and independent sewage water treatment plant contract awards in the water solutions segment.

The transaction’s financial impact will be reflected on SISCO’s Q2 2022 statements, which will be disclosed to the market in due course.

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