Logo of Elm Co.
Retail investors will start today, Feb. 3, subscription to about 7.2 million shares of Elm Co. at SAR 128 each, as set by the book-building process.
The Capital Market Authority (CMA) approved on Dec. 22, 2021, an application by Elm to offer 24 million shares, or 30% of its share capital, in an initial public offering (IPO).
The retail tranche subscription process will run for four days till Feb. 6.
The company’s institutional offering, which ended last week, was 69.5x covered.
Elm's IPO will be the third on the main market this year, following the IPO of East Pipes Integrated Company for Industry on Jan. 24, and Scientific & Medical Equipment House Co. on Jan. 31, 2022.
Last year witnessed nine IPOs, including Alkhorayef Water and Power Technologies Co., Theeb Rent a Car Co., Tanmiah Food Co., solutions, International Company for Power and Water Projects (ACWA Power), Arabian Contracting Services Co. (Al Arabia), Nayifat Finance Co., and Saudi Tadawul Group, and Almunajem Foods Co.
Company Info:
Elm was established in 1988 as a limited liability company with SAR 500,000 capital. In 2007, the company turned into a closed joint-stock company and its capital was increased to SAR 50 million. In November 2020, the capital was raised to SAR 500 million, then to SAR 800 million in June 2021 - its current capital.
The company's main activity is providing communications and information technology services, information security, electronic business, exchange of credit information, as well as providing electronic link services between the government sector and the private sector; managing, preparing, operating and maintaining data and information centers; wholesale and retail trade in electronic devices, software and communication networks; providing websites for sale and purchase; and other areas of project management, marketing and technical investment.
Elm is a leader in the integrated digital solutions market. It has a diversified portfolio that covers 13 industries.
Subsidiaries:
The company has seven subsidiaries, six of which are located in the Kingdom and one in the UAE, as follows:
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Subsidiaries |
||||
|
|
Company |
Date of incorporation |
Capital (SAR ‘000) |
Ownership |
|
1 |
Saudi Company for Exchanging Digital Information (Tabadul) |
2009 |
50000 |
100% |
|
2 |
Emdad Al Khebrat |
2014 |
500 |
100% |
|
3 |
Elm Technology Investment Company |
2019 |
500 |
100% |
|
4 |
Umrah Premium Services Company |
2020 |
500 |
100% |
|
5 |
Future Resources Ltd. |
2019 |
50 |
99.98% for Elm Technology Investment Company and 0.02% for Emdad Al Khebrat |
|
6 |
Asdam Digital FZ LLC* |
2021 |
50 |
100% by Future Resources Ltd. |
|
7 |
Elm Arkan for Information Systems Technology |
2005 |
500 |
60% by Future Resources Ltd. and 40% by Saud Saad Saud Alarifi |
Company’s Properties:
The company does not own any properties. It has 10 leased properties in the Kingdom, while Tabadul has one leased property.
|
Leased Properties |
||||
|
|
Lessor |
Location and space |
Rent value |
Rent duration |
|
1 |
Abdul Mohsen bin Khalid Al-Muqrin |
16.55 thousand m² - Riyadh |
SAR 10 mln annually, excluding tax |
10 years |
|
2 |
Abdul Mohsen bin Khalid Al-Muqrin |
120m² - Riyadh |
SAR 74 mln annually, excluding tax |
3 years |
|
3 |
Mishaal bin Abdullah bin Ahmed Al-Sharie |
2,700 m² - Riyadh |
SAR 2.7 mln annually |
4 years |
|
4 |
Endowments of Abdullah bin Turki Al-Dhahyan |
12.53 thousand m² - Riyadh |
SAR 9 mln annually |
2 years |
|
5 |
Abdullah Al-Suhail and Sons Real Estate Company |
3.46 thousand m² - Riyadh |
SAR 2 mln annually from Oct. 1, 2010 to Sept. 30, 2018 SAR 1.86 million annually from Oct. 1, 2018 to Sept. 30, 2021 |
3 years |
|
6 |
Prince Saud bin Fahd bin Abdulaziz Al Saud |
406.1 m² - Jeddah |
SAR 456,640 annually |
1 year |
|
7 |
Abdul Mohsen bin Khalid Al-Muqrin |
2,000 m² - Riyadh |
SAR 1.4 million annually |
3 years |
|
8 |
Abdul Mohsen bin Khalid Al-Muqrin |
1.325 m² - Riyadh |
SAR 795,000 annually |
3 years |
|
9 |
Abdul Mohsen bin Khalid Al-Muqrin |
1127 m² - Riyadh |
SAR 676,200 annually |
3 years |
|
10 |
Abdulaziz Mohamed Al-Mousa* |
Riyadh |
SAR 2.6 million paid in two equal installments annually |
5 years |
|
Company Profile |
|
|
Company |
Elm Co. |
|
Market |
Main market |
|
Core Activities |
Information technology - digital services |
|
Capital |
SAR 800 mln |
|
Number of shares |
80 mln |
|
IPO Summary |
|
|
Issue percentage (%) |
30% |
|
Number of shares offered for retail investors |
7.2 mln shares, or 30% of total offered shares amounting to 24 mln |
|
Offering price per share |
SAR 128/share |
|
Qualified subscribers |
Retail investors - This tranche comprises Saudi nationals, including Saudi female divorcees or widows with minor children from a non-Saudi father. It also includes any non-Saudi natural person who is a resident in the Kingdom and any GCC national, who holds a bank account with one of the receiving entities. |
|
IPO minimum limit for retail investors |
10 shares |
|
IPO maximum size for retail investors |
250,000 shares |
|
Retail subscription period |
4 days from Feb. 3 to Jan. 6, 2022 |
|
Final allotment |
Feb. 8, 2022 |
|
Surplus refunds |
Feb. 10, 2022 |
|
Rights issue proceeds |
The net proceeds from the IPO, after deducting IPO costs, will be distributed among selling shareholders on a pro rata basis. The company will not receive any portion of the IPO proceeds. |
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Additional Information |
|
|
Financial advisor, lead manager, underwriter and book runner |
Riyad Capital |
|
Receiving banks |
Riyad Bank, Saudi National Bank, Al Rajhi Bank, Arab National Bank |
The Public Investment Fund (PIF) is currently the full owner of the company. This percentage will decrease to 67% after the IPO.
The company said, upon finalizing the offering, that PIF will sell 2.4 million shares based on the final offer price to the company, to be used in the company’s employee stock option program.
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Company Shareholders |
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|
Shareholders |
Before IPO |
After IPO |
||
|
Number of shares (mln shares) |
Ownership (%) |
Number of shares (mln shares) |
Ownership (%) |
|
|
Public Investment Fund |
80.0 |
100% |
53.6 |
67% |
|
Public |
-- |
-- |
24.0 |
30% |
|
Treasury shares |
-- |
-- |
2.4 |
3% |
|
Total |
80.0 |
100% |
80.0 |
100 % |
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