ADNH Catering sets IPO price range, seeks to raise Dhs864m

Abu Dhabi’s ADNH Group has started taking investor orders for the initial public offering (IPO) of its catering business, and seeks to raise as much as $235m (Dhs864m), capitalising on the robust appetite for listings in the GCC region.

ADNH Catering is offering 9 million shares, equivalent to 40 per cent of the company’s total issued share capital. The indicative share price of Dhs0.91 and Dhs0.96 per share implies a market valuation of around $588m at the top of the range.

“With exposure to high-growth sectors such as healthcare and education and an expanding geographic footprint in Abu Dhabi and Dubai, we see significant potential in Saudi Arabia, especially in the Eastern Region, Jeddah, and Riyadh, where we are already making excellent progress on expanding our operations,” said Clive Cowley, CEO of ADNH Catering.

The catering firm, which provides food, cleaning, support services and manpower supply, is offering the shares in two tranches – to institutional investors and retail investors – between October 7 and October 15.

ADNH Group, the owner of hotels, including the Ritz-Carlton and Park Hyatt in Abu Dhabi, said the offering price would be determined on October 16, at the end of the book-building process.

ADNH Catering appointed Citigroup and First Abu Dhabi Bank as joint global coordinators and bookrunners for the IPO, while Emirates NBD Capital and Abu Dhabi Commercial Bank are joint bookrunners.

The catering firm is expected to debut on the Abu Dhabi Securities Exchange on October 23, 2024.

The catering firm’s revenues reached $444m (Dhs1.63bn) in 2023, and it registered a profit of Dhs422.5m during the period under review.

To attract investors, ADNH Catering plans to pay a Dhs180m performance-linked dividend from 2025 through 2026. The company also plans to increase the previous year’s dividend by a minimum of 5 per cent in December 2026.

A wave of listing activity in the GCC region, which gathered steam in late 2021, continues unabated as governments seek to diversify their economies away from oil by selling stakes in state-owned enterprises.

Oman state-owned energy giant OQ seeks to raise OMR780m ($2.02bn) from the IPO of its exploration and production business in what is the sultanate’s biggest offering on record. OQ Exploration and Production (OQEP) is offering 2 billion shares, equivalent to 25 per cent of the company’s total issued share capital.

Meanwhile, Saudi Arabia’s Fourth Milling Company (MC4) is set to raise $229m from an IPO on the local stock exchange, adding to a string of listings in the kingdom and the wider GCC region.

The GCC region has seen a flurry of IPOs in recent years as governments in countries such as Saudi Arabia and the UAE try to diversify their economies with reform plans that include deepening capital markets to attract investment.

Read: Abu Dhabi’s ADNH Catering plans to list 40% on local bourse