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Fawaz Abdulaziz Alhokair & Co. (Cenomi Retail) Announces the Signing of a share purchase agreement with Abdullah Al-Othaim Fashion Company to Sell a subsidiary that will own the franchise rights for 18 Brands Delivering on Transformation Promise
4240
CENOMI RETAIL
4.14
%
1445/05/23 07/12/2023 08:15:05
| Element List | Explanation |
|---|---|
| Introduction | Cenomi Retail, Saudi Arabia’s pioneering retail brand partner, has signed a share purchase agreement on 6 December 2023 for the acquisition by Abdullah Al-Othaim Fashion Company, a fully owned subsidiary of Abdullah Al-Othaim Investment Company, of 100% of the share capital of Innovative Outfit Trading Company (“Target Company”), a subsidiary of Cenomi Retail, that will own the franchise rights for 18 of its brands and their related assets. The sale forms part of Cenomi Retail’s on-going transformation program and strategy of focusing on Champion Brands. Cenomi Retail will use the net proceeds from the sale to deleverage the business and focus on Champion brands within the Fashion, Electronics and Food & Beverage categories. |
| Transaction Details | Abdullah Al-Othaim Fashion Company will acquire the Target Company along with the franchise rights for the brands and their corresponding 244 stores and assets for the agreed price of SAR 120 million and an additional consideration for inventory on-hand will be calculated at the time of deal closing and store handover which is anticipated in Q1’24. The transaction is subject to a number of conditions to be completed after signing, including, without limitation, the approval of Saudi Arabia’s General Authority for Competition, the entry by the Target Company of new franchise agreements and the consent of the landlords for the store transfer. |
| Transaction Value | 120 Million SAR, in addition to the value of inventory on hand |
| Transaction Terms | The agreement is subject to a number of pre-closing conditions, including -but not limited to- obtaining the approval of the General Authority for Competition as well as other conditions of regulatory and commercial natures such as the entry by the Target Company of new franchise agreements and the consent of the landlords for the store transfer |
| Parties of the Transaction | Fawaz Abdulaziz Alhokair & Co. (Cenomi Retail) Abdullah Al-Othaim Fashion Company |
| Transaction Execution Date | 2023-12-06 Corresponding to 1445-05-22 |
| Description of the Business of the Asset forming the Subject Matter of the Transaction | The sale relates to brands operated by Cenomi across the Fashion retail business, including, without limitation, household names such as Flormar, Oxxo and Monsoon; |
| Asset Book Value | Book Value will be determined at closing and handover after satisfying all conditions and accounting for inventory on hand at the time of closing as well as any potential goodwill impact |
| Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction | N/A |
| Transaction reasons | The sale forms part of Cenomi Retail’s on-going transformation program and strategy of focusing on Champion Brands |
| Expected Impact of the Transaction on the Company and Its Operations | The Brands contributed SAR 238 million to revenue in the 9 months to September 30th 2023, 5.7% of Cenomi Retail’s total revenue with the divestment expected to positively impact profitability with EBITDA increasing in the order of SAR 10 million on an annualized basis. The financial impact of the transaction is expected to be recognized in Q1’24 results upon transaction closing and handover completion. |
| Details of Using The Proceeds of the Asset Sale | Net proceeds of the transaction to contribute to the company’s ongoing deleveraging efforts |
| Related Parties | N/A |
| Additional Information | Any material developments will be announced in due course |
| Attached Documents |  |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.
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