Dubai: The stage is set for one of the biggest deals in the UAE's food sector - the transfer of ownership in Abu Dhabi based dates processing company Al Foah to Agthia Group. The latter has asked its shareholders to approve the offer from Senaat (General Holding Corp.) to combine with Al Foah, which is the world's largest dates processing and packaging company.
Senaat’s offer will see the transfer of Al Foah assets (excluding its organic date farm in Al Ain) to Agthia in exchange for 120 million shares in Agthia. This will be done through issuing a convertible instrument, which will then be converted into shares, at a fixed price of Dh3.75 a share. This implies an equity value of Dh450 million for Al Foah.
Following this, Senaat would own 59.17 per cent of the entire issued share capital of Agthia, up from the 51 per cent it currently owns in the Group.
Dh450millionThe equity value of Al Foah Company after the issuing of new Agthia shares at Dh3.75 apiece
In the 12 months ending June 30, Al Foah achieved revenues of Dh470 million and an EBITDA of Dh96 million. It had net income of Dh77 million. The combined entity will become a UAe market leader in in four essential categories - bottled/packaged water, dates, flour, and animal feed. It will also compete across the MENA region.
Alan Smith, CEO of Agthia Group, said: “We see the transaction with Al Foah as a key enabler to accelerate our ambitions, bringing together two UAE leaders in their respective food and beverage product categories to create one of the Top 10 consumer F&B players in the MENA region by revenue."
“We expect the deal to be immediately accretive to Agthia’s shareholders with its significantly value-enhancing potential. It will serve to further strengthen the company’s balance sheet, offering multiple revenue and cost synergies as well as the potential for further international expansion in the fast-growing date market.”
The transaction will now be put forward to Agthia’s General Assembly and is subject to regulatory and shareholder approvals.