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Arabian Centres Co. Announces the Acquisition of an E-Commerce Platform with a value of SAR 68.9 Million

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Introduction Arabian Centres Company (“ACC” or “the Company”) announces the signing on Tuesday 18 Rajab 1442H corresponding to 02 March 2021 of a Share Purchase Agreement (“the Agreement” or “the SPA”) to acquire 25.5% of the share capital of Vogacloset Limited (“the Target”) the owner and operator of the online platform www.vogacloset.com (“the Platform”).
Transaction Details ACC announces the signing of an SPA on Tuesday 18 Rajab 1442H corresponding to 02 March 2021 to acquire 39,253 ordinary shares of Vogacloset Limited, which represent 25.5% of the Target’s total shares post its capital increase, through the mixture of the following:

1) Acquisition of existing 13,598 shares in the Target valued at USD 6,360,348 (SAR 23,857,286),

2) And increasing the Target’s Capital by 25,655 ordinary shares valued at USD 11,999,906 (SAR 44,999,647).

Vogacloset Limited is the owner and operator of the online platform www.vogacloset.com. The Target will continue to be independently run and managed by its founding executive and management team, including the Chief Executive Officer, Chief Operations Officer and Chairman. The Target will continue to manage and operate its online e-commerce platform.

This transaction gives the Company access to a leading international e-commerce platform with strong recognition and presence in the Middle East and Saudi Arabia to put it closer to its customers.

The Company confirms that there are no related parties in this acquisition from the sellers of the Target, other than the other buyer of the Target’s shares.

As part of the Agreement, it is also noted that “Fawaz Abdulaziz Alhokair & Co.”, a Saudi publicly listed company, would also be acquiring (39,253) ordinary shares in the Target, which represents (25.5%) of the share capital post capital increase pursuant to the Agreement.

Transaction Value USD 18,360,254 (SAR 68,856,933) to be paid from ACC’s side against the acquisition of the 25.5% of the Target’s share capital post capital increase
Transaction Terms The Agreement include typical warranties and undertakings by the Sellers in similar transactions.

The Agreement further provides for the Selling and continuing shareholders including the Executives of the Target to receive earn-out incentives based on the valuation of their shares held over the next three financial years post this transaction completion. The earn-out provisions are based on certain underlying requirements agreed upon in the Agreement being met in terms of business performance, with a cap on earn-outs in all cases.

The Company through the Agreement will own 25.5% of Vogacloset Limited share capital and will hold two seats in its Board.

Further, the Company and the Target shareholders have in place a put and call option agreement starting three years from the Transaction date on the Target shareholders’ remaining shares pursuant to the normal provisions in similar transactions as stipulated in the Agreement.

In addition, the Agreement grants the right to the Company to assign the benefit of the Agreement to any member of its group.

Parties of the Transaction 1) Arabian Centres Company (“Buyer”).

2) Fawaz Abdulaziz Alhokair & Co (“Buyer”).

3) Vogacloset Shareholders (“Sellers”).

Transaction Funding Method The transaction will be funded from the Company’s internal resources. The purchase price will be paid in cash to the Target owners upon completion of the process of signing the amended article of association as per the regulations.
Transaction Execution Date 2021-03-02 Corresponding to 1442-07-18
Description of the Business of the Asset forming the Subject Matter of the Transaction Vogacloset is a UK-based online fashion platform that operates through www.vogacloset.com, offering the latest women’s, men’s and kids’ trends to consumers in the Middle East.
Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction Revenue:

2018: USD 42.25 Mn (SAR 158.42 Mn).

2019: USD 47.48 Mn (SAR 178.04 Mn).

2020: USD 71.00 Mn (SAR 266.27 Mn).

Net income/(Losses):

2018: USD (0.06) Mn (SAR (0.24) Mn).

2019: USD (0.21) Mn (SAR (0.80) Mn).

2020: USD 2.92 Mn (SAR 10.94 Mn).

Transaction reasons To accelerate digitisation strategies in response to growing demand for omnichannel retail experiences tailored to suit the changing preferences of Saudi customers. And as a result of this digitisation strategies, the Company would be able provide its malls’ visitors with a specialized and advanced loyalty program, also a simplified and innovative consumer financing solutions. Moreover, ACC would be able to offer a more holistic proposition for its tenants, by giving their brands an improved online presence.
Expected Impact of the Transaction on the Company and Its Operations There is no direct impact on the Company’s liabilities. However, the Company expects to see the positive financial effect of the transaction from Q1-FY2022 onwards, and an increase in the tenants’ sales through the provision of their brands offerings on the platform.
Related Parties None, other than the other buyer.
Additional Information The signing of this agreement does not mean that the transaction is closed, since it is subject to the completion of the commitments outlined in the Disclosure letter.

ACC will announce the closing of the transaction or any material updates in due time.

Attached Documents  

The Capital Market Authority and the Saudi Stock 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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