JAZADCO to buy Jazel Investments, issue new shares

Jazan Energy and Development Co. (JAZADCO) inked a binding and conditional agreement to acquire 100% of Jazel Investments Limited for SAR 410.03 million, the company said in a bourse filing. 

Under the agreement, JAZADCO is entitled to receive Jazel Investments’ earnings from Jan. 1, 2020, to Dec. 31, 2020, and partners at Jazel Investments have no right to share this profit.

Jazel Investments’ evaluation was based on data collection method.

The acquired shares are valued at SAR 410.03 million, to be paid via issue of 32.8 million new shares for selling partners.

The number of new shares is based on the average daily closing price of JAZADCO shares for 170 trading days preceding the deal (Feb. 27 to Nov. 5, 2020).

The deal included related parties: Ahmed Mohammed Al Sanea (JAZADCO chairman, who owns 4% stake in the company), Al-Jawhara bint Fahd bin Abdullah (major shareholder in JAZADCO (7.89%), and owns 20% stake in Jazel Investments), and Majid Abdullah Al Issa (JAZADCO’s vice chairman, and owns 1% of Jazel Investments).

The agreement is binding and conditional upon the approval of the competent authorities and JAZADCO’s extraordinary general meeting.

JAZADCO is entitled to terminate the agreement in case of a material event that may weigh on Jazel Investments’ operations and units.

The acquisition deal came in line with JAZADCO’s growth and diversification strategy, while seeking to enhance the company’s performance and competitiveness via expansions.

The acquisition will further allow JAZADCO to tap into new fields including energy and services.

Jazel Investments is a holding company that doesn’t have direct commercial business activities, however, it has controlling stakes in subsidiaries, as follows:

- Axis Inspection Ltd. (75%)

- Technical Contracting Co. (98%)

- Performance Minerals& Chemicals (99%)

- The company also has a 70%-owned contracting unit and another indirectly-owned subsidiary.