Red Sea buys 51% of First Fix for SAR 544.2 mln

Logo of Red Sea International Co.

Red Sea International Co. (RSI) acquired a 51% stake in Fundamental Installation for Electric Work Co. Ltd. (First Fix) for a cash consideration of SAR 544.2 million.

In a statement to Tadawul, RSI said it will pay a total of SAR 250 million to the sellers in cash in the proportions. Further, a deferred consideration of SAR 294.2 million will be settled within four months from the signing date, subject to satisfaction of certain conditions.

RSI will retain the option to capitalize the debt represented by the deferred consideration, it added, noting that any similar transaction will be subject to applicable regulatory and corporate approvals.

 The acquisition will be funded through bank loans.

The sellers are MSB Holding Co., a limited liability company incorporated in Saudi Arabia, Fares Esmat Al Saady and Ziad Jan Alsayegh.

The financial impact will be positive as First Fix will be a subsidiary of RSI. Accordingly, the financial results of First Fix will be consolidated into the company’s financial statements upon completion of the transaction.

RSI will gain a critical stream of electromechanical and civil construction capability. As an established brand in residential, industrial and commercial modular construction, this is a positive amalgamation with First Fix who share the same vision of providing comprehensive and excellent quality housing and building services while being conscious of sustainability and environmental concerns, locally and internationally.

First Fix was established as a limited liability company in 2015 with more than 190 world class projects delivered through end-to-end solutions that offered integrated design, engineering and construction disciplines of mechanical, electrical & plumbing (MEP).

With a human capital of over 8,000 employees across the Saudi Arabia, First Fix has operated as a leading contractor across the GCC and has over many years been a consistent performer financially and operationally. During 2022, First Fix reached its historic highest annual Revenues of SAR 1.49 billion with a Net profit of SAR 148 million. Apart from past performance, First Fix also has a strong financial forecast, backed by their project order backlog of SAR 3.4 billion which will be delivered during 2023 and beyond.

The acquisition closure will be subject to satisfaction of certain regulatory and corporate conditions, as well as RSI’s due diligence.

The sale and purchase agreement (SPA) includes customary fundamental, business and tax warranties granted to Red Sea International in connection with the business affairs of First Fix.

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