Harry Cummins
Updated on: October 15, 2024 11:01 pm GMT
In an ambitious move to expand its market presence, ADNH Catering, a leading food and support services provider in the UAE, is set to publicly offer 40% of its share capital in an initial public offering (IPO) listing on the Abu Dhabi Securities Exchange (ADX). This significant step not only highlights the company’s market influence but also opens doors for a broader range of investors looking to participate in a growing sector.
IPO Details and Structure
ADNH Catering plans to list 900 million shares, each with a nominal value of AED 0.10, making it accessible for both retail and professional investors. The IPO’s structure will be divided into three tranches:
- First Tranche: Available to UAE retail investors.
- Second Tranche: Reserved for professional investors.
- Third Tranche: Allocated for eligible employees of ADNH Group.
Existing shareholders of ADNH Group will also have a unique opportunity, with up to 10% of the shares in the IPO allocated specifically for them. This prioritization reflects the company’s commitment to its long-standing investors.
Subscription Period and Pricing
The subscription period for UAE retail investors and eligible employees will open on October 7 and close on October 14, while professional investors can subscribe until October 15. The offer price will be determined through a book-building process, a common practice in IPO structuring that allows for price validation based on investor interest.
Company Overview and Market Position
Established in 1979, ADNH Catering has carved a niche for itself in the hospitality sector of the UAE. Holding approximately 28% of the addressable food services market, the company serves a diverse client base across five strategic sectors, including government and private enterprises. Clive Cowley, CEO of ADNH Catering, emphasized the company’s long-standing relationships, stating, “We pride ourselves on our long-standing relationships with clients across government and the private sector, with over 90 percent of our contracts lasting for over five years.”
The company’s strong market presence is further underscored by its active operations in neighboring Saudi Arabia through a joint venture with Compass Group and Al-Rushaid Petroleum Investment Company.
Growth Projections
The food services market in the UAE and Saudi Arabia is projected to grow substantially, from $5.2 billion in 2023 to an estimated $6.8 billion by 2028. ADNH Catering’s addressable market is also on track for notable growth, expected to rise from $3.5 billion in 2023 to approximately $4.5 billion in 2028.
Khalaf Sultan Al Dhaheri, Chairman of ADNH Catering, remarked, “Since 1979, ADNH Catering has been a core component of the growth of the UAE’s hospitality industry, partnering with government and private sector clients across food services and support services.” These insights reinforce the company’s pivotal role in the regional hospitality landscape.
Management and Strategic Partnerships
ADNH Catering has enlisted notable financial institutions to ensure the success of its IPO. Citigroup Global Markets Limited and First Abu Dhabi Bank PJSC will serve as joint global coordinators and joint bookrunners. Emirates NBD Capital PSC and Abu Dhabi Commercial Bank PJSC join them as joint bookrunners, with First Abu Dhabi Bank appointed as the lead receiving bank.
Additionally, several banks, including Abu Dhabi Commercial Bank PJSC, Abu Dhabi Islamic Bank PJSC, Emirates NBD Bank PJSC, and Emirates Islamic Bank PJSC, will facilitate the receiving process for the IPO.
Conclusion
ADNH Catering’s IPO stands as a milestone in the company’s journey and the broader hospitality industry in the UAE. As it prepares to offer its shares to the public, investors need to pay close attention to this opportunity, which promises not just financial returns but participation in a flourishing sector. The public offering is set to begin on October 7 and could reshape the landscape of food and support services in the region.
If you want to learn more about ADNH Catering and its IPO, you can check out what the company has to offer and how it can grow in the market.
