Fourth Milling Company to float IPO on Tadawul

Fourth Milling Company (MC4), a leading flour producer in Saudi Arabia, announced plans for an initial public offering (IPO) of 162 million shares, representing 30 per cent of the company’s total issued capital.

The Capital Market Authority (CMA) approved the IPO on June 26.

The offer price will be determined after the institutional bookbuilding process concludes, with the net proceeds set to benefit selling shareholders. The company itself will not receive any of the proceeds.

Fourth Milling Company has a robust presence in the Saudi flour market, and it is known for its premium FOOM brand, which holds the largest market share.

The company’s production facilities, strategically located across Dammam, Madinah, and Al-Kharj, position it to serve over 80 per cent of the Saudi population.

Fourth Milling Company has shown strong growth

MC4 has experienced strong financial growth, with revenues rising from SAR336m in 2021 to SAR566m in 2023, a compound annual growth rate (CAGR) of 29.7 per cent. EBITDA margins improved from 32.1 per cent in 2021 to 38 per cent in 2023.

As of December 31, 2023, the company had no outstanding debt, giving it a significant competitive advantage over its peers. This financial position allows it considerable flexibility to invest in growth opportunities and deliver returns to shareholders.

MC4’s chairman, Bader Hamed AlAujan, highlighted the company’s pivotal role in Saudi Arabia’s milling industry: “With the IPO, we embark on an exciting new chapter. Over the coming years we aim to further strengthen our market position, expand our product portfolio and continue to invest in infrastructure, people and processes. Our dedication to excellence and innovation will drive us forward as we pursue these ambitious goals.”

He added: “We are well-prepared for our next phase of growth, aiming to strengthen our market position and expand our product portfolio.”

CEO Khalid Al Maktary emphasised the IPO as a milestone in the company’s journey, noting its transformation post-privatisation in 2021 and its 31.1 per cent consumer market share by volume.

The IPO aligns with MC4’s strategy to bolster its core business, enhance production capacity, and develop human capital while continuing to meet growing consumer demand.

The company’s leadership team, supported by major shareholders, aims to leverage its position in Saudi Arabia’s food security agenda and capitalise on wheat and flour market growth.