Logo of Seera Group Holding
Seera Group Holding signed, on Sept. 12, a non-binding term sheet with the Public Investment Fund (PIF) on the fund’s proposed investment in its wholly-owned subsidiary, Almosafer Travel and Tourism Co.
Almosafer owns or is expected to own Seera’s various subsidiaries operating its travel and tourism business (consumer travel, business travel, destination management, Hajj and Umrah) as part of the transaction, the Saudi-listed firm said in a bourse statement today, Sept. 13.
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Transaction Details |
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Targeted company |
Almosafer Travel and Tourism Co. |
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Signing parties |
PIF and Seera |
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Signing date |
Sept. 12, 2022 |
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Transaction |
PIF's investment in Almosafer Travel and Tourism Co. |
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Signing subject |
Seera will restructure its subsidiaries operating in the tourism and travel sector (consumer travel, business travel, destination management, Hajj and Umrah) to be owned by Almosafer |
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Initial total value of Almosafer and related subsidiaries |
SAR 3.75 bln |
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PIF’s total investment |
PIF or a wholly-owned entity of the fund, will subscribe to new ordinary shares, representing 30% of Almosafer's capital, for SAR 1.554 billion, including an earn-out amount of up to SAR 386 million. |
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Terms |
Achieving pre-agreed KPIs for financial years 2023 and 2024. |
PIF’s investment, which includes the earn-out amount, is based on a preliminary pre-enterprise value of Almosafer and the relevant subsidiaries of SAR 3.75 billion.
The fund plans to acquire a 30% stake in Almosafer for up to SAR 1.554 billion. The amount includes a potential amount of up to SAR 386 million that could be paid to Almosafer for newly issued shares, conditional on specific pre-agreed KPIs that Almosafer must achieve in the financial years 2023 and 2024.
This amount is subject to PIF’s due diligence test and the application of debt, debt-like and other adjustments on the completion of the transaction, the statement added.
As part of the restructuring procedures, Seera’s destination management company, Discover Saudi, and its Hajj & Umrah B2B operator, Mawasim, will now fall under the umbrella of Almosafer. This travel platform will collectively capture domestic, inbound, and religious opportunities.
The signing of the term sheet is a strategic milestone in Seera’s transformation plan, announced in 2017, to strengthen the group’s businesses and enhance long-term value for shareholders.
Almosafer aims to use the capital infusion to scale its inbound, outbound, religious and domestic tourism operations, to strengthen its credentials as a national champion of travel and tourism services in Saudi Arabia.
The transaction is subject to obtaining regulatory and any other approvals as may be required by the parties, the statement said.
The signing of the definitive agreements will be subject to a number of conditions, including the completion of a customary due diligence test by PIF.
The term sheet also includes other customary provisions that are legally binding, such as confidentiality, exclusivity, costs, and other matters.
If the parties agree to proceed with the transaction, Almosafer intends to use the subscription amount for funding growth and expansion programs related to its business, investing in tourism assets, products (including technology), as well as enhancing customer and inbound tourist experiences.
The term sheet will be terminated if the parties execute the definitive agreements earlier, deliver written notice from one party to the other party, or on a mutual written agreement.
Other than certain customary boilerplate provisions such as confidentiality, exclusivity, costs and governing law, the term sheet is not legally binding, Seera noted.
Any material developments regarding the term sheet or the proposed transaction it concerns will be announced in due course.
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