Alef Education Holding, a UAE-based education technology company, plans to list its shares on the Abu Dhabi Securities Exchange as it seeks to boost its domestic business and expand its international footprint.
Alef will sell 1.4 billion shares, or 20 per cent of the company's issued share capital, through an initial public offering on the main bourse of the ADX, it said on Monday.
All shares being offered in the public float are held by existing shareholders Tech Nova Investment and Kryptonite Investments. The selling shareholders reserve the right to amend the size of the offering.
UAE retail and institutional investors will be able to subscribe to the public float through separate tranches.
The subscription period for retail and qualified investors will begin on May 28.
The first tranche, for retail investors, will close on June 4 while the second, for qualified institutional investors, will conclude on June 5, the company said.
Retail investors will be able to subscribe to 8 per cent, or 112 million shares, of the total share capital on offer while the institutional tranche will comprise 92 per cent, or 1.28 billion shares.
Alef expects its shares to start trading on the ADX on June 12, subject to regulatory approvals.
“Our IPO on ADX is an important milestone and natural progression in our journey to maximise our potential and become a global EdTech [education technology] leader,” Alef chief executive Geoffrey Alphonso said.
“We intend to solidify our market leadership at home and grow our presence across our target markets through continued investment in our digital capabilities, broadening our product offering and expanding our geographic footprint – both organically and through strategic M&A [mergers and acquisitions].”
Markets in the Mena region have recorded strong listing activity this year amid increasing investor interest and a public mandate aimed at supporting IPOs to boost liquidity in local bourses.
In the GCC, 10 companies have tapped equity markets for funds, raising a combined $1.2 billion in proceeds in the first quarter of this year, according to PwC's quarterly IPO Watch report.
The intention to float shares by Alef is the latest among companies lining up to list in the UAE amid a sustained economic momentum.
Markets in Abu Dhabi and Dubai have experienced strong listing activity over the past few years.
Companies in Dubai raised Dh34.5 billion ($9.4 billion) by selling shares over the past three years, with aggregate investor demand for those listings reaching more than Dh1 trillion, the Dubai Securities and Exchange Higher Committee said in March.
Dubai's parking operator Parkin and retailer Spinney's are the latest businesses to float IPOs in the emirate, where the government is pursuing plans to list 10 state-owned companies and establish a Dh2 billion marketmaker fund to encourage listings by private companies in sectors such as energy, logistics and retail.
In Abu Dhabi, Adnoc Gas, Investcorp Capital and the UAE's largest health care operator, Pure Health, are among the companies that have floated shares last year.
Alef is indirectly majority owned by Abu Dhabi Capital Group, a private institutional investment company that has a multi-asset class portfolio across the Mena region.
The company provides artificial intelligence-powered learning and digital education resources to schools in the UAE, Jordan, Indonesia, Morocco and the US.
Its platform serves about 7,000 schools, with about 1.1 million registered students and 50,000 teachers.
The company is pursuing both organic and inorganic growth strategies and looking to expand in markets closer to home, Mr Alphonso said on Monday.
“We have categorised the focus for the firm over the next few years … close to the home market, which we feel are around the neighbouring GCC,” he said.
“We put boots on the ground in Saudi, we've had some great interaction in Qatar [and] there's still a lot of work to do here in the UAE.”
The company is also open to accretive acquisition and has a robust mergers and acquisitions pipeline, he said.
“We do have plans to close one to two, accretive M&A this year which will complement the business and help us fulfil our growth ambitions,” he said.
First Abu Dhabi Bank and EFG Hermes UAE have been appointed as joint lead managers and joint bookrunners on the deal.
FAB has also been appointed as lead receiving bank alongside Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank and Al Maryah Community Bank, the receiving banks for the retail investor tranche.
Alef, whose revenue for the 12-month period ending in December last year stood at Dh750 million, has a long-standing contract with the Abu Dhabi Department of Education and Knowledge, which provides “significant revenue visibility and predictability over the next seven years”.
Such long-dated contracts enable the education technology company to “pursue growth initiatives and deliver value to shareholders”, it said.
