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Red Sea International Co. Announces Purchase 51% of the share capital of The Fundamental Installation for Electric Work Company Ltd. (First Fix) by means of cash consideration in the value of SAR 544,170,000/-
| Element List | Explanation |
|---|---|
| Transaction Details | The purchase price is SAR 544,170,000 for 51% of the share capital of the Company. |
| Transaction Value | SAR 544,170,000/- |
| Transaction Terms | The transaction consideration will be paid as follows: 1. A sum of SAR 250,000,000 (the “Initial Consideration”) shall be paid to the Sellers in cash in the proportions; 2. A sum of SAR 294,170,000 ("Deferred Consideration") will be settled within 4 months from the signing date subject to satisfaction of certain conditions precedent. Red Sea International will have the option to capitalize the debt represented by the Deferred Consideration. Any such transaction will be subject to applicable regulatory and corporate approvals. |
| Parties of the Transaction | The Acquisition Deal involves the following parties (Sellers): A. MSB Holding Company, a limited liability company incorporated in the Kingdom of Saudi Arabia under Commercial Registration Number 4030293528 (“MSB Holding”); B. Mr. Fares Esmat Al Saady; and C. Mr. Ziad Jan Alsayegh |
| Transaction Funding Method | The transaction will be funded through a bank loan. |
| Transaction Execution Date | 2023-06-09 Corresponding to 1444-11-20 |
| Description of the Business of the Asset forming the Subject Matter of the Transaction | The Fundamental Installation for Electric Work Company Ltd. (First Fix), a limited liability company organized and existing under the laws and regulations of the Kingdom of Saudi Arabia under Commercial Registration No. 4030279152 dated 1436/02/11H (corresponding to December 3, 2014). First Fix is a local construction firm since 2015 with more than 190 world class projects delivered through end to end solutions that offered integrated design, engineering and construction disciplines of mechanical, electrical & plumbing (MEP). With a human capital of over 8,000 employees across KSA, First Fix has operated as a leading contractor across the GCC and has over many years been a consistent performer financially and operationally. During 2022, First Fix reached its historic highest annual Revenues of SAR 1.49 billion with a Net profit of SAR 148 million. Apart from past performance, First Fix also has a strong financial forecast, backed by their project order backlog of SAR 3.4 billion which will be delivered during 2023 and beyond. |
| Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction | The audited financial statements for The Fundamental Installation for Electric Work Company Limited (First Fix) are not published as they are a private / limited liability company. |
| Transaction reasons | RSI will gain a critical stream of electromechanical and civil construction capability which are very crucial to every single client need. As an established brand in residential, industrial and commercial modular construction, this is a positive amalgamation with First Fix who share the same vision of providing comprehensive and excellent quality housing and building services while being conscious of sustainability and environmental concerns, locally and internationally. |
| Expected Impact of the Transaction on the Company and Its Operations | The financial impact will be positive as RSI will buy 51% shareholding in The Fundamental Installation for Electric Work Company Limited (First Fix) which will make them a subsidiary of Red Sea International. Accordingly, the financial results of First Fix will be consolidated into Red Sea International's financial statement upon completion of the transaction. |
| Related Parties | Not applicable |
| Additional Information | Completion of the Acquisition Deal will be subject to satisfaction of certain regulatory and corporate conditions, in addition to certain conditions which resulted from the due diligence exercises carried by Red Sea International over Fundamental Installation for Electric Work Company Ltd. (First Fix). The SPA includes customary fundamental, business and tax warranties granted to Red Sea International in connection with the business affairs of The Fundamental Installation for Electric Work Company Ltd. (First Fix). The Fundamental Installation for Electric Work Company Ltd. (First Fix) will continue to be independently run and managed by its current executive and management team. Red Sea International will announce the closing of the Acquisition Deal or any material developments in respect of the Acquisition Deal in due course. |
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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Value Traded (Sar) 10,564,257.3
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