Vaza Food deal to boost profitability after integration: BinDawood Holding CEO

BinDawood Holding eyes margin expansion, growth with Vaza acquisition

Ahmad Abdulrazzaq BinDawood, CEO of BinDawood Holding Co., said the company’s acquisition of a 51% stake in Vaza Food Co. will have a positive impact on BinDawood Holding’s financial performance, noting that Vaza generated revenues of approximately SAR 93 million in 2024, with strong growth opportunities in the coming period.

In an interview with Argaam, BinDawood added that the acquisition is expected to support the company’s profitability from the first year following the completion of operational integration, excluding non-recurring costs associated with the transaction. He also noted that Vaza’s net profit (unaudited) for 2025 is expected to reach around SAR 35 million.

He added that the initial acquisition value was set at SAR 217.9 million, to be financed through a mix of internal resources and available credit facilities, supported by the company’s strong operating cash flows and solid financial position.

BinDawood said the acquisition represents a strategic step to diversify revenue streams and expand into higher value-added segments, with a focus on operational integration, margin improvement, and accelerating expansion through specialized brands to drive sustainable shareholder value over the medium and long term.

The strategy is primarily driven by enhancing profitability margins, as the premium confectionery and specialty food segment offers higher gross margins than traditional retail.

It also supports revenue growth, with Vaza expected to outperform market growth by leveraging BinDawood and Danube’s customer base, as well as expanding across digital channels and points of sale.

The acquisition is also expected to have a positive, gradual impact on net profit as integration progresses, while maintaining a balanced financial structure and disciplined leverage levels.

BinDawood added that the deal represents a vertical integration model, as Vaza’s specialized manufacturing capabilities will enhance operational efficiency, improve supply chain control, reduce reliance on external suppliers, and achieve economies of scale through unified procurement, integrated logistics, and distribution across the group’s network.

He further noted that expansion will be supported by utilizing store space within Danube and BinDawood outlets to open Vaza points of sale at low capital cost, enabling faster growth. The acquisition also aims to maximize value from the existing customer base through cross-selling, broader geographic reach, and integration into the group’s e-commerce platforms, enhancing market access without significant additional marketing investments.

He pointed out that BinDawood Holding has executed around 10 acquisitions and investments between 2022 and 2026, including majority and full acquisitions, increased indirect ownership through subsidiaries, and selective minority investments.