Saudi Arabia’s largest pharmacy chain plans to expand its primary healthcare business and may consider acquisitions as it decided to proceed with an IPO in the kingdom.
Nahdi Medical Co. may use its pharmacies across the kingdom to start offering primary healthcare services, building on existing clinics in Jeddah, Chief Executive Officer Yasser Joharji told reporters. The company, which claims its stores are five minutes away from 90 percent of Saudi Arabia’s population, is also looking to expand its business in neighbouring United Arab Emirates, including through acquisitions, he said.
The pharmacy chain plans to sell a 30 percent stake and has hired units of HSBC Holdings Plc and Saudi National Bank to manage the initial public offering, according to a statement. The book-building process is expected in early March, Joharji said.
“We believe we’ve reached a stage where we can open and share what we have built by inviting more shareholders into our company, which will add value to us not only from a financial point of view or funding point of view, but more importantly in terms of best practices and exposure,” Joharji said.
More family-owned businesses in Saudi Arabia are listing on the kingdom’s exchange as share sales see huge investor demand, with most IPOs getting priced at the top of offering ranges. The most recent wave has already seen a digital security firm owned by Saudi Arabia’s wealth fund draw about $57bn in orders from institutional investors.
Saudi Arabian companies raised almost $9.3bn from share offerings last year, making it the most active IPO market in the Middle East and Africa behind Israel, according to data compiled by Bloomberg. Last week, Al Dawaa Medical Services Co., another pharmaceutical retail company in Saudi Arabia, said it is seeking to raise about $500m from an IPO.
Nahdi Medical is seeking a valuation of about SAR16bn ($4.3bn) in the IPO, people familiar with the matter said earlier this month. The firm, half owned by Jeddah-based investment firm Sedco Holding, received regulatory approval for the listing in December. Al Nahdi Holding Co., the other shareholder, and Sedco will both sell an equal number of shares in the IPO.
Nahdi Medical has a network of pharmacies with 1,151 outlets across 144 cities. It had a revenue of SAR8.6bn and profit of SAR849m for 2020.
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