Elm to finance Thiqah acquisition mainly from banks: CEO

Mohammad Alomair, CEO of Elm Co.

Mohammad Alomair, CEO of Elm Co., said the acquisition of the Public Investment Fund's (PIF) entire stake in Thiqah Business Services Co. will be mainly financed from bank facilities, in addition to the company’s available cash.

Alomair explained that this deal will help build a strong track record with banks in the upcoming period, Al-Arabiya reported.

Acquisitions are a fundamental part of Elm's strategy, as it mainly targets approximately 20% of its revenues from acquisitions over the next five years, whether locally or globally.

Thiqah, known for its electronic services, aligns with Elm’s goals to strengthen the latter's position as a leading IT company in the region, acquire a large number of Thiqah's clients, and retain its exceptional talent pool.

Further, the CEO said there are environmental synergies between Elm and Thiqah that can be leveraged to achieve greater profitability in the future. He emphasized that the integration between the two companies would yield numerous benefits, including expanding the client base and private sector operations.

Elm focuses primarily on government-related sectors, while Thiqah operates in other areas with minimal overlap, highlighting the potential for strategic integration.

Alomair described Thiqah as a significant addition to Elm, currently contributing around 25% of the company’s revenue. He added that the integration is expected to reduce costs significantly and enhance Elm's value through increasing its customer base and private sector activities.

According to data available with Argaam, Elm signed on Jan. 21 a share sale and purchase agreement with the PIF allowing the Tadawul-listed firm to acquire the fund’s entire stake of 45,000 shares or 100% of Thiqah for SAR 1,000 per share.

The deal is valued at SAR 3.4 billion (less some costs and expenses related to the acquisition deal), to be paid by Elm to PIF.