Saudi Billionaire’s Investment Firm Plans IPO of Top Drugstore

(Bloomberg) -- Saudi Arabia's largest pharmacy retail chain plans to seek about $1.3 billion in an initial public offering in the next few months in what could be the largest share sale in the kingdom since state oil giant Saudi Aramco went public in 2019, according to people familiar with the matter.

Al Nahdi Medical Co. has appointed the local unit of HSBC Holdings Plc and the investment banking arm of Saudi National Bank to manage the sale of a 30% stake on the Saudi stock market, the people said, asking not to be identified because the information is private. The company is considering seeking a valuation of around 16 billion riyals ($4.3 billion) in the IPO, the people said.

Deliberations are ongoing, and details of the potential offering haven't been finalized, the people said. The firm, half owned by Jeddah-based investment firm Sedco Holding, received regulatory approval for the listing in December.

While the kingdom's wealth fund has been behind many of the biggest recent listings, an increasing number of Saudi family businesses are also capitalizing on soaring demand for stocks and testing the equity markets. Sedco is the investment firm of the Bin Mahfouz family, one of the country's biggest merchant clans that was behind the establishment of Saudi Arabia's biggest bank.

Al Nahdi, SNB Capital and HSBC declined to comment.

Momentum Intact

The offering adds to signs that demand for new share offerings is carrying into this year after a boom period across the Middle East in 2021. The most recent wave of listings has already seen a digital security firm owned by Saudi Arabia's wealth fund draw about $57 billion in orders from institutional investors in an offering that sought to raise up to $820 million.

Saudi companies raised almost $9.3 billion from share offerings last year, making it the most active IPO market in the Middle East and Africa behind Israel, according to data compiled by Bloomberg. ACWA Power International's $1.2 billion IPO last year was the largest since Aramco raised almost $30 billion in the world's biggest ever stock offering.

Founded in 1986, Al Nahdi has a network of pharmacies with 1,151 outlets across 144 cities. It also has another pharmacy in the United Arab Emirates.

A successful listing of Al Nahdi would represent a rare IPO by a pharmacy chain and would rank it among the largest in the industry.

Walgreens Boots Alliance is currently in the process of selling off its Boots drugstores unit in a deal that could value the chain at up to $9.6 billion, people familiar told Bloomberg in January. Indian pharmacy chain MedPlus Health Services Ltd. raised almost 14 billion rupees ($187 million) in an IPO last month.