BinDawood Holding subsidiary signs deal to acquire 62% stake in International Applications

BinDawood Holding Co. (BDH) announced that its fully-owned subsidiary, Future Tech Retail, signed, on March 24, a sale and purchase agreement with Amwaj Real Estate Co. Ltd. and First Commercial Application Co. to acquire their 62% stake in International Applications Trading Co. (IATC), according to a bourse filing.

The agreed consideration for the acquired stake will include initial cash consideration of SAR 107.5 million subject to net debt adjustment at closing, as well as a potential additional amount to be paid in 2023 if IATC records certain revenue milestones contained in the agreement for 2022. In addition, it includes a possible earn-out amount to be paid in 2026 if IATC records certain profitability parameters contained in the agreement for 2025.

The agreement contains customary representations, warranties and undertakings provided by the sellers, the company said.

The deal closing will be subject to certain conditions, including, without limitation, the receipt of the relevant corporate, shareholder, commercial and regulatory approvals on the transaction.

Amwaj, a related party of BDH, owns 42% of IATC, while 20% is held by First Commercial Applications Co., in which AbdulRazzag BinDawood holds 50%. He is an indirect shareholder and Chairman of BDH, as well as Chairman of IATC.

IATC is a related party of BDH, as AbdulRazzaq BinDawood, Abdulkhaliq Dawood Ibrahim BinDawood, Khalid BinDawood, Tariq BinDawood and Ahmad BinDawood, who are board directors of BDH, have an indirect ownership interest in IATC. Additionally, Ahmad BinDawood is a board member of BDH and IATC.

IATC develops and operates online e-commerce platforms and online mobile applications. In addition, it provides management of the services relating to online platforms and mobile applications.

The founder and management team of IATC will remain with IATC. Following the deal completion, the company is committed to investing an addition amount of up to SAR 160 million in IATC over two years to support the development of the platforms and roll-out of a network of state-of-the-art dark stores, as well as fulfillment centers to optimize operations, fully integrate the customer experience and provide shorter lead delivery times.

Such additional investment will increase the company’s indirect stake in IATC, the precise quantum of which will depend on the valuation of IATC as determined after the finalization of its audited accounts for 2022.

The following table indicates the financial statement of IATC:

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