The dairy and juice producer said it intended to offer 122.5 million ordinary shares, representing just under half of the company’s share capital, with 90% being made available to international investors and 10% for domestic Egyptian traders. Domty gave a guide price of between EGP 8.8 and EGP 9.2 (US$1.12 to US$1.17), but said this was subject to change until the actual listing.
The announcement comes alongside that of a new milestone with Tetra Pak.
Owners pledge $38m cash injection
After the listing, expected later this month, the existing shareholders will invest an additional US$38.3m into the company. Currently ownership of the company is split, with the El Damaty family owning 65% and Yehia Bin Laden owning 35%.
“We look forward to meeting with domestic and international investors to discuss the compelling corporate and market fundamentals that have allowed us to become a household name with a number-one position in Egypt’s cheese market,” said Omar El Damaty, Domty chairman and managing director.
“We will also be discussing with them our plans to penetrate both new market categories in Egypt as well as high-growth African markets subsequent to [a US$38.3m] capital injection by the selling shareholders that will follow our IPO,” he added.
Middle East and North African investment bank EFG Hermes is organising the IPO and is reported to be promoting the Domty offering in markets including the US, UK, South Africa and the GCC (Gulf Cooperation Council).
IPO to undercut Juhayna?
Domty’s sales for the first ten months of 2015 came to more than US$148m, up 26% for the same period in 2014. Based on this, and the stated share price range, which is equivalent to around 17 to 18 times Domty’s annualised earnings, Bloomberg suggested the firm was trying to undercut local rival Juhayna, the shares of which trade at around 21 times earnings.
Last month Domty was the largest producer of cheese using Tetra Pak packaging in the world, for the third year running. Domty and Tetra Pak marked the event with a press conference, where the dairy firm confirmed its plans to build a new US$12.7m factory, with capacity to produce 300 million products a year.
“Domty remains committed to contributing to the Egyptian economy through expanding its investments, as well as continuing to provide the market with high-quality products. This is a result of our long-term partnership with Tetra Pak Egypt,” said El Damaty at the event.