solutions by stc announces intention for IPO on Tadawul

Logo of solutions by stc

Arabian Internet and Communications Services Co. (solutions by stc) announced today, Aug. 22, its intention to launch initial public offering (IPO) on the Saudi Exchange (Tadawul).

solutions by stc plans to float 20% of its share capital (or 24 million ordinary shares) in IPO on the Saudi market, the company said in a statement.

The final offer price will be determined at the end of the book-building period, it added.

The offering will be restricted to the following two groups of investors:

- Participating parties: This tranche comprises the parties entitled to participate in the book building process as specified under the book building instructions. The number of shares that will be allocated initially is 24 million, representing 100% of the total IPO. Final allocation of the offer shares will be made after the end of the subscription period for individual investors. If individual investors subscribe to the offer shares allocated thereto, the lead managers shall have the right to reduce the number of shares allocated to participating parties to a minimum of 21,600,000, representing 90% of the total offer shares.

- Individual investors: This tranche comprises Saudi Arabian natural persons, in addition to any non-Saudi natural person who is resident in the Kingdom or any GCC natural persons, provided they have a bank account with one of the receiving entities and are allowed to open an investment account.

solutions by stc launched its operations in 1996, and to date, has serviced almost 24,000 clients across 35 cities in Saudi Arabia and in key sectors, including financial services, healthcare and education.

The company has approximately 1,500 employees with over 800 certified on key technologies and domains.

As of end of December 2018, solutions by stc accounted for a 13% market-leading share of Saudi Arabia’s information and communications technology (ICT) services market.

It registered a net revenue growth of 30.6% at compound annual growth rate (CAGR), across all service categories from 2018-2020, and an attractive net profit growth of 12.3% CAGR for the same period.

It offers a wide range of ICT services and integrated digital solutions through its main platforms (sales to stc and sales to the business segment) and across all business units.

The company has a broad portfolio across the IT & digital value chain, enabling one-stop-shop for B2B sector, with a focus on core ICT services, IT managed and operational services, and digital services.

Below table details the services provided by the company:

Commenting on the IPO, Riyadh S. Muawad, Chairman of solutions by stc, said that the company operates in the GCC’s largest economy and digital hub. The company’s strategy helped in promoting its business growth and contributed to stimulating the IT market across the Kingdom and taking advantage of its promising opportunities.

Omer Alnomany, solutions by stc’s Chief Executive Officer (CEO), stated that the IPO step represents an important milestone in the company’s journey. “Our consistent growth, strong profitability, operational expertise and market leading capabilities have allowed us to maintain our position as the leading digital enabler for Saudi Arabia.”

“We have ambitious plans in a sector filled with opportunities and look forward to further strengthening and improving our profitability across our business lines, as well as investing in new business lines, extending our customer segments and developing new ones, and leveraging our platform,” he added.

According to data compiled by Argaam, the CMA approved on June 28 a request by solutions by stc to float a 20% stake, or 24 million shares, in an IPO.

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