SAUDI ARABIA –Saudi Arabia’s largest pharmacy retail chain plans to seek US$1.3 billion in an initial public offering in the coming months, Arabian Business has reported, citing sources privy to the information.
This could be the largest share sale in the kingdom since state oil giant Saudi Aramco went public in 2019.
Al Nahdi Medical Co. has appointed the local unit of HSBC Holdings Plc and the investment banking arm of Saudi National Bank to manage the sale of a 30% stake on the Saudi stock exchange.
According to the sources, the company is considering an IPO with a valuation of around 16 billion riyals (US$4.3 billion).
Deliberations are still ongoing, and details of the potential offering have not been finalized, according to the sources.
In December, the firm, which is half owned by the Jeddah-based investment firm Sedco Holding, received regulatory approval for the listing.
While the kingdom’s wealth fund has been behind many of the most recent listings, an increasing number of Saudi family businesses are also taking advantage of soaring stock demand and testing the equity markets.
Sedco is the investment firm of the Bin Mahfouz family, one of the country’s most powerful merchant families and the driving force behind the establishment of Saudi Arabia’s largest bank.
Al Nahdi’s successful listing would be a rare IPO by a pharmacy chain and would place it among the largest in the industry.
The offering adds to evidence that demand for new share offerings is continuing into this year following a surge in the Middle East in 2021.
In the most recent wave of listings, a digital security firm owned by Saudi Arabia’s wealth fund received approximately US$57 billion in orders from institutional investors in an offering that sought up to US$820 million.
According to data compiled by Bloomberg, Saudi companies raised nearly US$9.3 billion in share offerings last year, making it the second most active IPO market in the Middle East and Africa after Israel.
Al Nahdi, which was founded in 1986, operates a pharmacy network with 1,151 locations in 144 cities. There is also a pharmacy in the United Arab Emirates.
In other news, Walgreens Boots Alliance is currently in the process of selling its Boots drugstores unit in a deal that could value the chain at up to US$9.6 billion.
Similarly, MedPlus Health Services Ltd., an Indian pharmacy chain, raised nearly 14 billion rupees ($187 million) in an IPO last month.
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