ADNH Catering PLC (“ADNH Catering Group” or the “Group”), a leading food and support services group in the UAE and the GCC, announced 13 December 2024 it has (acting through its subsidiary, ADNH Catering) entered into a Sale and Purchase Agreement (“SPA”) for the acquisition of an additional 20% equity share in its Saudi Joint Venture from Compass Group. Completion of the Transaction is subject to regulatory requirements and is expected to occur in Q1 2025.
Under the terms of the SPA, ADNH Catering Group will (acting through its subsidiary, ADNH Catering) acquire an additional 20% equity stake in the Saudi Joint Venture, thereby increasing its shareholding from 30% to 50%. Al Rushaid Group will hold the remaining 50% equity stake. The Saudi Joint Venture will be rebranded following completion of the transaction, which is expected to occur in Q1 2025.
Along with entering the SPA, ADNH Catering PLC (acting through its subsidiary, ADNH Catering) entered into a shareholder agreement with Al Rushaid Group whereby the Group (acting through its subsidiary, ADNH Catering) will manage the Saudi Joint Venture and have control over its operations. Accordingly, the Saudi Joint Venture’s financial position and results of operations will be consolidated in ADNH Catering’s financial statements post-completion of the transaction.
The compelling macroeconomic growth story in Saudi Arabia makes it an attractive market for ADNH Catering Group, and the growth of its operations in the Kingdom is a key pillar of its strategy. Solutions currently offered by the Saudi Joint Venture in the Saudi market are predominantly in the food services segment, complemented by support services. ADNH Catering Group believes that Riyadh, as the Kingdom’s largest and most rapidly expanding city, and the high-growth private healthcare sector represent especially compelling opportunities to increase market share in the Kingdom.
The Saudi Joint Venture dates to 2012 and has seen healthy business growth, with the number of clients served growing by 17% from September 2021 to September 2023. Building on this momentum, ADNH Catering Group plans to leverage its specialized know-how, extensive experience, reputable client portfolio, and impressive track record across the sectors it serves in the UAE to expand its operations across various business segments and provinces in the Kingdom, including Riyadh.
Clive Cowley, Chief Executive Officer of ADNH Catering Group commented on this milestone: “Today marks an important milestone for our business, maintaining momentum in the execution of our strategy as set out at the time of our IPO, which we successfully completed on 23 October 2024. With the increase of our equity share in our Saudi Joint Venture, we are seeking to build out from our market-leading position in the UAE to expand ADNH Catering Group’s operations across various business segments and provinces in the Kingdom, including Riyadh.
The SPA entered with Compass Group to acquire an additional 20% equity stake in the Saudi Joint Venture within a month of completing our IPO is a testament to our clear and unwavering resolve to expand our operations in the Kingdom in pursuit of business growth and shareholder value creation.” ADNH Catering Group will announce further updates on the transaction in due course.
