Ordinary shares of Arabian Food Industries Company Domty S.A.E. (DOMT.CA on the Egyptian Exchange) will begin trading today at 10:00am CLT on the EGX, opening at EGP 9.20 per share.
Trading begins after a book-building process that saw selling shareholders including El Damaty family (c. 65 per cent) and Mr. Yehia Bin Laden (c. 35 per cent) offer 110,250,000 shares to international institutional investors and 12,250,000 more to Egyptian retail investors (together, the “Combined Offering.”) The institutional offering was more than 5.5x oversubscribed, while the Egyptian retail offering was 10.7x oversubscribed.
In total, the Combined Offering of 122,500,000 was 6x oversubscribed, having generated demand for 739,040,360 shares (or EGP 6.8 billion in total demand). EFG Hermes Promoting & Underwriting was sole global coordinator and bookrunner for the Combined Offering. Baker & McKenzie LLP was international counsel to the issuer, while Matouk Bassiouny served as local counsel and Akanar Partners as financial advisor.
The market capitalization of the company stands at EGP 2.3 billion at the start of trading prior to the execution of a closed subscription that will see Domty offer the Selling Shareholders the right to subscribe to newly issued shares, pro rata to the percentage of shares sold by the selling shareholders in the Combined Offering, subject to certain conditions. Upon completion of the Closed Subscription, the selling shareholders will inject EGP 300 million into the company.
Following the completion of the Combined Offering and the Closed Subscription, the Company expects to have a free float of 43 per cent, assuming no stabilizing purchases are made by the stabilizing manager and no shares are returned to the selling shareholders at the end of the stabilization period.
Domty Chairman and Managing Director Mr. Omar El Damaty said, “Today is a day without precedent for our family, our fellow shareholders and to the employees who have helped us build Domty into the nation’s top producer of cheese and a leading player in the local juice market. Our company began commercial operations in 1990, but in becoming today a publicly traded company, our journey has in many respects just begun. I am confident we have the right team, the right strategy and the right portfolio of brands to create new shareholder value in the years ahead as we invest in addition production capacity, new products and the penetration of high-potential expansion markets.”
Domty manufactures, markets and distributes a range of branded white and processed cheeses and juice products. Its portfolio of brands includes the flagship Domty brand as well as the ‘fighter’ brands Ge billionety and Damo (which target new consumer brackets) and the juice brand Bravo (targeting export markets). Egypt’s number-one cheese producer by market share, Domty holds leading positions in unprocessed (or “natural”) soft packaged cheese as well as processed packaged cheese. The company also became a top five player in the highly fragmented and competitive juice segment less than two years from its entry into the sector.
Commenting on the transaction, Moustafa El Chiati, Managing Director at EFG Hermes said, “The high rate of oversubscription from some of the world’s leading institutional investors as well as from regional and local fund managers speaks to both Domty’s corporate fundamentals and to those of Egypt’s very attractive consumer market. It exemplifies the strong foundation of the Egyptian economy and is a testament to EFG Hermes’ strong placement power. It is significant that the transaction is being executed amid exceptional volatility in global financial markets that has seen a number of companies globally and regionally pull back from offerings this since the beginning of 2016.”
