Bawan buys out Arnon Plastic for SAR 191 mln

Bawan Co. has completed the purchase of a 100 percent of Arnon Plastic Industries Co. Ltd. for SAR 191 million, the company said in a bourse statement.

Arnon is a wholly-owned subsidiary of Al Fozan Holding Group.

The acquired entity was valued using several valuation methods including the discounted cash flow (DCF) and profit multiples.

Bawan appointed Riyad Capital as financial advisor for Arnon's acquisition. Abuhimed Alsheikh & Alhagbani (AS&H) and Clifford Chance were hired as legal advisors. Meanwhile, PricewaterhouseCoopers (PwC) along with Bain & Company were mandated to conduct the financial and commercial due-diligence studies, respectively.

The deal will be financed from operating cash flows and bank facilities. The relevant financial impact will reflect on Bawan's earnings for FY2019.

The deal comes within Bawan’s strategy to diversify its customer base and product mix, the statement added.

Under the sale deal, Al Fozan Holding pledged that all information mentioned within Arnon's financials and accounts is correct and that Arnon's assets are debt-free. Al Fozan also pledged to compensate Bawan for any liabilities, or Zakat dues pertaining to Arnon and were not fulfilled before the sale agreement. Al Fozan also provided a two-year unconditional bank guarantee at 15 percent of the purchase deal value to be used by Bawan in case of any violation of the sale agreement.

Other terms and conditions within the deal shall be fulfilled by Al Fozan within 180 days of the signing date.