Target Information

BinDawood Holding, a prominent grocery retail operator in the Kingdom of Saudi Arabia, has successfully listed on the Saudi Stock Exchange (Tadawul). The company operates a total of 73 stores, comprising 51 hypermarkets and 22 supermarkets. These are situated nationwide, catering to a broad customer base under the BinDawood and Danube brands. Since Investcorp acquired a minority stake in BinDawood in 2016, the company has experienced significant growth and development.

Ahmad Abdulrazzaq BinDawood, the Chief Executive Officer of BinDawood Holding, highlighted that Investcorp has been a crucial strategic partner in their journey toward becoming a publicly-listed company. Their collaboration has transformed BinDawood from a family-run business to an institutional entity, positioning it for further expansion in the competitive retail landscape of Saudi Arabia.

Industry Overview in Saudi Arabia

The grocery retail industry in Saudi Arabia has been experiencing a remarkable transformation, driven by increased consumer demand and changing shopping behaviors. Saudi Arabia's Vision 2030 emphasizes economic diversification, which includes a strategic focus on enhancing retail offerings and modernizing the sector. As a result, the grocery retail landscape is evolving to include a mix of traditional markets and modern retail formats, catering to an increasingly sophisticated consumer base.

With a growing population and rising disposable incomes, food and grocery shopping is becoming more prominent. The hypermarket and supermarket formats are gaining significant traction as customers seek convenience, variety, and quality. Key players in the market are expanding their footprint, investing in technology, and improving supply chain management to meet the demands of the modern shopper.

The competitive environment is also marked by a rise in e-commerce, prompting traditional retailers to adapt and innovate. Online shopping for groceries is gaining popularity, pushing companies to enhance their digital capabilities alongside their brick-and-mortar operations. This trend reflects a broader shift in consumer preferences, favoring accessible and efficient shopping experiences.

Moreover, government support for the retail sector and foreign investment is expected to bolster growth. As businesses align with the Vision 2030 goals, the grocery retail sector in Saudi Arabia is poised for continued expansion and modernization, creating greater opportunities for market participants.

Rationale Behind the Deal

The decision to list BinDawood on the Tadawul Stock Exchange aligns with Investcorp's strategy to unlock value from its portfolio companies. By going public, BinDawood is not only able to enhance its visibility and brand appeal but also gain access to capital to fuel its growth ambitions. Listing serves as a critical milestone in their journey, allowing for further investments to upgrade their infrastructure and expand their store network.

Additionally, this transaction exemplifies Investcorp's commitment to supporting high-potential enterprises in Saudi Arabia and reflects the firm's confidence in the future of the grocery retail market in the region. Through strategic partnerships and operational enhancements, the goal is to solidify BinDawood's position as a leader in the supermarket sector.

Information About the Investor

Investcorp is a globally recognized provider of alternative investment products, with a strong focus on creating value for its clients and portfolio companies. With a robust presence in the Kingdom of Saudi Arabia, the firm has made significant strides in the private equity landscape by investing in high-growth companies across diverse sectors, including healthcare, retail, and industrial services.

Since its establishment, Investcorp has demonstrated a steadfast commitment to identifying and supporting dynamic businesses in the region. Their extensive investment experience allows them to provide strategic guidance to portfolio companies, fostering growth and innovation while aligning with broader economic initiatives such as Saudi Arabia's Vision 2030.

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This listing is viewed as a strategic move, suggesting that Investcorp has effectively leveraged its expertise in realizing substantial benefits from BinDawood's operations. The successful public offering is likely to generate substantial capital for further expansion and to enhance its competitive edge in the market.

Moreover, the ongoing collaboration between Investcorp and BinDawood, with Investcorp remaining on the board post-listing, provides a reassuring continuity that will be beneficial for the latter's growth trajectory. This continued partnership is expected to yield long-term value for shareholders and strengthen the company’s market standing.

The grocery retail sector in Saudi Arabia appears receptive to innovative approaches and increased competition, indicating that investments aligned with consumer trends can yield favorable outcomes. As BinDawood capitalizes on its new standing as a public entity, there are expectations for not only short-term growth but also sustained evolution as a key player in the retail space.

Overall, this investment decision is regarded positively, with the potential for both parties to achieve significant returns through strategic growth initiatives and a focus on enhancing operational efficiencies.

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