Saudi Arabia’s Elm to acquire Thiqah from PIF for $907m

Saudi Arabia’s Public Investment Fund (PIF) said on Wednesday that it is selling business services firm Thiqah to Elm for $907m (SAR3.4bn) as the wealth fund seeks to boost its coffers to ramp up local investments to accelerate the kingdom’s economic diversification programme.

Information and communications technology (ICT) is a priority investment sector for PIF. The fund emphasised that the deal will strengthen the local ICT sector, contributing to its goal of creating high-skilled jobs and driving economic growth.

The acquisition is expected to close once regulatory approvals are received and certain conditions under the agreement are met. Elm said in a bourse filing that it would fund the deal in cash through its own resources and facilities.

Thiqah is wholly owned by PIF, which also holds a 67 per cent stake in Elm after it sold shares in the company in an initial public offering in 2022. Elm’s stock has risen over 800 per cent since then.

Elm expects the acquisition to support its strategic growth plan and strengthen its position as a key player in Saudi Arabia’s digital services market. By expanding its market reach and offering a wider array of complementary services, the company can better serve its existing customers and capitalise on the growth of key market segments.

“PIF’s sale of Thiqah to Elm will contribute to enhancing the vital role of the ICT sector and will strengthen efforts to localise technology and drive innovation,” Shahd Attar, head of Technology and Media, MENA Investments at PIF.

Meanwhile, PIF, which has nearly $1tn in assets under management, is the main engine of Prime Minister and Crown Prince Mohammed bin Salman’s strategy to wean Saudi Arabia’s economy off its dependence on the oil that made it one of the world’s wealthiest nations.

The plan, known as “Vision 2030”, aims to develop new sectors and create more sustainable revenue streams. Since 2017, the $925bn sovereign fund has created 95 new companies and over 644,000 direct and indirect jobs.

Last October, PIF Governor Yasir Al Rumayyan said that the fund’s focus was shifting to the domestic economy as it looked to develop new industries and promote economic diversification. The fund raised SAR3.86bn from selling a 2 per cent stake in telecoms firm stc Group in November.

Read: Saudi Arabia’s PIF raises $1bn from stc Group stake sale