AlBabtain Food to sell entire 3% stake in Jordanian company

The SPA was signed with Indulgent Food International Holding Ltd., registered with the Dubai International Financial Centre (DIFC), according to a Tadawul statement.

The deal is part of the buyer’s acquisition of a 70% stake in Chocolate Lake from the selling shareholders.

Under the agreement, AlBabtain Food will sell its entire stake of 1,800 shares, representing 3% of the company’s capital. Ownership of the shares will be transferred upon fulfilment of the conditions precedent and completion procedures stipulated in the agreement.

The total equity value of Chocolate Lake was set at $171 million before the adjustments specified in the agreement. AlBabtain Food is entitled to 4.29% of the total consideration allocated to the selling shareholders.

The final consideration payable to the company will be determined upon completion after applying the agreed adjustments, expenses and costs, including shareholder account balances, any leakage, warranty and undertaking insurance costs, and the agreed time-value amount.

Deal completion is subject to several conditions, including regulatory approvals, waivers or approvals from financing parties regarding the change of control, completing regulatory procedures for the transfer of the shares.

The agreement will remain in effect until completion of the transaction, subject to the fulfilment or waiver of the conditions precedent and the long-stop date specified in the agreement.  

It also includes potential additional consideration linked to Chocolate Lake’s financial performance during FY2027 and FY2028, calculated based on adjusted EBITDA levels and the formulas and thresholds specified in the agreement.

The value of this additional consideration cannot currently be determined, as it depends on the company’s future financial performance and fulfilment of the specified conditions.

The agreement provides for $5 million of the selling shareholders’ total proceeds to be held in an escrow account for three years from the completion date to cover any claims that may arise under the agreement.

AlBabtain Food’s carrying value of its stake in Chocolate Lake stood at SAR 3.64 million, according to the company’s latest financial statements. The transaction is part of the company’s efforts to realize value from its investments, strengthen its financial position and focus on its core activities and businesses.

The company expects the transaction to have a positive financial impact, although the final capital gain cannot currently be determined due to the adjustments, costs, expenses and liabilities associated with the transaction.

The final consideration and financial impact will be announced upon completion. The financial impact is expected to be recognized in Q4 2026, when the transaction’s conditions are expected to be fulfilled and ownership of the shares transferred.

AlBabtain Food intends to use the net proceeds from the transaction to support its financial position and fund its activities and strategic plans. There are no related parties involved in the transaction.

The company clarified that signing the agreement does not constitute completion of the transaction, which remains subject to fulfilment of the conditions and receipt of the relevant approvals.

AlBabtain Food will announce any material developments related to the transaction, including fulfilment of the conditions precedent, completion of the transaction, and determination of the final consideration and financial impact, in accordance with the applicable laws and regulations.