(Bloomberg) —
Saudi Arabian grocery chain BinDawood Holding bought a majority stake in e-commerce app manager and developer International Applications Trading Co. for an initial payment of 107.5 million riyals ($28.7 million) that could increase subject to future profitability milestones.
BinDawood Holding, through its Future Technology Retail unit, signed a definitive agreement to acquire a 62% stake in IATC, according to a statement. The unit will make additional payments in 2023 and 2026, subject to achieving revenue and profitability parameters in the respective previous years. The deal is expected to close in the second half of the year.
The founder and IATC’s management team will remain in place, and BinDawood will invest up to an additional 160 million riyals over a two-year period to develop the platforms, the roll-out of stores and fulfillment centers and to help shorten delivery times, the company said.
The additional investment will increase BinDawood’s stake in IATC, with the overall position to be determined after IATC’s valuation following the finalizing of its fiscal 2022 results.
BinDawood stocks rose 1.1% as the country’s benchmark index advanced. Trading volume was double the average for this time of day. The shares increased to 96 riyals from 95 riyals.
Saudi Arabia is among the largest and fastest growing e-commerce markets in the region, with e-grocery shopping still in a nascent phase, BinDawood CEO Ahmad BinDawood said in statement, adding the firm is looking to control 30% of the market by 2028.
(Updates with share price move)
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