ADNH Catering IPO: Company could raise up to $235m from ADX listing

It plans to announce final offer price on October 16 and start trading on October 23

All shares being offered for sale through the public float are held by the company's parent ADNH, which also trades on the ADX. Victor Besa / The National

ADNH Catering, a unit of Abu Dhabi National Hotels, aims to raise up to Dh864 million ($235 million) from its initial public offering on the Abu Dhabi Securities Exchange this month amid rising investor demand for listings in the region.

The company has set the offer price range between Dh0.91 and Dh0.96 per share and plans to issue 900,000,000 shares, or 40 per cent of its total share capital. Its total market valuation upon listing will be between Dh2.05 billion and Dh2.16 billion, it said in a statement on Monday.

All shares being offered for sale through the public float are held by the company's parent ADNH, which also trades on the ADX.

The subscription period opens on October 7 and is expected to close on October 14 for UAE retail investors and eligible employees, and on October 15 for professional investors.

The company plans to announce the final offer price on October 16, with shares expected to start trading on the ADX on October 23.

ADNH Catering offers services including food preparation as well as general cleaning, housekeeping, pest control, and procurement in the UAE and Saudi Arabia. It operates across the health care, business and industry, defence, correctional, and education sectors and has approximately 160 on-site kitchens that serve more than 260 clients through 350 contracts. It delivers more than 11 million meals a month.

“With exposure to high-growth sectors such as healthcare and education, and an expanding geographic footprint in Abu Dhabi and Dubai, we also see significant potential in Saudi Arabia, especially in the Eastern Region, Jeddah, and Riyadh, where we are already making excellent progress on expanding our operations,” said Clive Cowley, chief executive of ADNH Catering.

The company, which currently operates in Saudi Arabia through a joint venture with Compass Group and Al Rushaid Petroleum Investment Company, plans to expand its business in the kingdom by about 10 per cent annually, Mr Cowley told The National last week.

ADNH Catering controls 30 per cent of the joint venture and is in talks with Saudi partners to increase its equity holding in the company.

“We're confident that we can improve our shareholding in that business, but also grow the business significantly,” Mr Cowley said at the time, adding that it is “premature” to say what will be the Abu Dhabi company's eventual stake in the Saudi joint venture.

“We have been in discussion for some time … [and] certainly all the discussions are positive”.

It is also open to acquiring stakes in smaller “complementary businesses” in the UAE to further expand its food and services business in country, Mr Cowley added.

ADNH Catering is the latest company seeking to capitalise on the IPO boom in the UAE driven by growing investor demand amid strong economic growth.

It follows the listing of NMDC Energy, a unit of Abu Dhabi contractor National Marine Dredging Company, which began trading on the ADX last month after closing the biggest IPO in the Emirates this year.

The float, which was oversubscribed by more than 31 times, raised Dh3.22 billion through the sale of 23 per cent of the company's total share capital.

ADNH Catering is being advised by Citigroup, First Abu Dhabi Bank, Emirates NBD Capital and Abu Dhabi Commercial Bank for the IPO. FAB will serve as the lead receiving bank, while ADCB, Abu Dhabi Islamic Bank, ENBD and Emirates Islamic Bank have been appointed as receiving banks.