ADES International Holding, a leading oil and gas drilling and production services provider in the MENA, accepted the acquisition offer presented by Innovative Energy Holding.
Innovative Energy is a newly established company that is jointly owned by the Public Investment Fund (PIF), which will hold a 32.5 percent stake in the company.
Zamil Group Investment, an existing investor in the company, will hold 10 percent of Innovative Energy, and ADES Investments Holding with majority ownership of 57.5 percent in Innovative Energy, in each case following completion of the acquisition of all ADES Shares.
Commenting on the offer becoming unconditional, ADES CEO Mohamed Farouk described the unconditional offer as a “strategic partnership with one of the world’s largest sovereign wealth funds, that believes in ADES International’s ability to generate long-term sustainable value.”
PIF’s investment in ADES International is a vote of confidence and a testament to management’s success in executing its strategy, even during the challenging last twelve months, and ability to deliver on the company’s long-term growth plans, according to Farouk.
The CEO indicated that “at the time of our IPO on the London Stock Exchange in 2017, our target was to access a larger pool of investors to raise capital and seize attractive market opportunities while growing the business through the acquisition and refurbishment of rigs and other assets. “
He revealed the company’s strategy that transformed ADES International from a local, offshore-focused driller in Egypt, to a regional champion with a significant asset base across both the on- and offshore segments.
“We are thus pleased to have provided our shareholders with the opportunity to capitalize on this success through a significant liquidity event, realizing an attractive cash premium for their shares.”
He asserted that ADES International will continue to focus on providing quality, innovative services to its clients and leveraging its existing asset base to capture new business as a private company that is able to benefit from a longer-term approach to strategy and decision making.
The operational headquarters of the ADES International group will be relocated to Saudi Arabia, announced Farouk, indicating that it will also have greater flexibility to pursue strategic opportunities, including in relation to capital allocation and financing.
Commenting on the announcement, PIF Head of Local Holdings Investments Division Yazeed al-Humied announced the Fund’s delight in partnering with ADES International, saying the partnership will create a national champion in Saudi Arabia is a critical part of the upstream value chain.
“It will help localize best-in-class practice and lead to the important knowledge transfer of fuel usage reduction technologies which can deliver both cost savings and environmental benefits.”
CEO of Zamil Group Adib al-Zamil lauded the partnership, saying it will further support private sector growth through the localizing of knowledge and technology solutions in the upstream space.
This deal will see the development of a company that will be an integral part of the oil and gas and hydrocarbon value chain, add immense economic and intellectual value to the Saudi market, and create job opportunities for Saudis in this vital sector, according to Zamil.
Further to ADES International's announcement of the satisfaction of conditions relating to the Saudi General Authority for Competition and shareholder approval of the Disapplication Resolution, the offer has now become unconditional in all respects.
The offer price of $12.50 per share in cash for each ADES Share values the existing issued share capital, excluding Treasury Shares, of ADES International at approximately $516 million.
