Saudi Arabia’s Avalon Pharma to list 30% stake on Tadawul

The book-building process for the share offer will run from January 14 to 18

The Riyadh skyline. Avalon Pharma’s listing would be the latest in a string of IPOs on the Tadawul stock exchange. Reuters

Riyadh-based pharmaceutical company Avalon Pharma plans to list 30 per cent of its shares on the Tadawul stock exchange amid plans to expand globally.

The company, which is selling 6 million of its shares to the “participating parties” and individual investors, said the final offer price of the shares would be determined at the end of the book-building process, between January 14 and 18.

If there is “sufficient” demand by individual investors, the number of shares initially allocated to participating parties will be reduced to 5.4 million, representing 90 per cent of the total offered shares, Avalon Pharma said on Sunday.

“We are a true success story within the kingdom, having developed and expanded significantly during this time, venturing into new areas and products as we have adapted to, and anticipated, market demand,” said Ahmed Tabbaa, founder and chairman of Avalon Pharma.

“In listing on the Saudi Exchange, we are now able to capture future growth and provide an opportunity for a greater number of stakeholders to share in our success.”

Avalon Pharma’s listing would be the latest in a string of IPOs on the Tadawul, the biggest Arab bourse by market value.

Last month, regional broadcaster MBC Group raised 831 million Saudi riyals ($222 million) in an IPO after pricing it at the top of the range.

The company set the final offering price at 25 riyals a share, for its offering of a 10 per cent stake amid “robust investor demand”. The pricing valued the group at 8.3 billion riyals.

SAL Saudi Logistics Services Company’s began trading on Tadawul on November 1 after raising $678 million from its IPO.

Meanwhile, oil and gas drilling company Ades Holding raised $1.2 billion in the kingdom’s largest IPO in 2023.

The volume of IPOs on bourses in the Mena region rose by 44 per cent annually in the second quarter of 2023 amid robust economic growth, global consultancy EY firm said.

Growth in Mena IPO deals was driven by Saudi Arabia and the UAE, the top two regional economies, EY said in a September report.

Avalon Pharma, which began operations in 1998, is involved in the manufacturing and marketing of a wide range of consumer health and beauty brands as well as generic prescription medicines.

The company exports products to over 10 countries across the Middle East and North Africa region and is one of the fastest growing consumer pharma companies in Saudi Arabia.

“The market within the kingdom is changing rapidly and we are well-placed to capture future growth across the region,” said Mohammed Al Ghannam, managing director and chief executive of Avalon Pharma.

Saudi Arabia’s pharmaceuticals market has been growing steadily in recent years, driven by the increasing prevalence of chronic diseases, including diabetes and hypertension.

The government has also been investing heavily in the healthcare sector as drug makers focus on more specialised drugs in areas such as oncology and rare diseases.

The kingdom’s pharmaceuticals market is expected to reach $10.6 billion by 2028, from $8.9 billion in 2022, market research company Imarc Group said.