|Introduction||Seera Group Holding ("Seera") announces the signing of a non-binding term sheet Monday evening of 12 September 2022 with the Public Investment Fund ("PIF") in relation to the proposed investment by PIF in Almosafer Travel and Tourism Company (a 100% subsidiary of Seera) ("Almosafer") which owns, or is expected to own as part of the transaction, Seera’s various subsidiaries operating its travel and tourism business (consumer travel, business travel, destination management and Hajj and Umrah). The PIF investment amount (including the earn-out amount) is based on a preliminary pre-money enterprise value of Almosafer and the relevant subsidiaries of Three Billion and Seven Hundred and Fifty Million Saudi Riyals (SAR 3,750 million). The earn-out amount will be conditional on Almosafer achieving certain pre-agreed KPIs in the financial years 2023 and 2024. PIF seeks to have a shareholding in Almosafer of 30% for a total consideration of up to SAR 1,554 million (including an up to SAR 386 million earn-out amount) to be paid to Almosafer in subscription for new shares in Almosafer.
As part of the re-organisation, Seera’s destination management company (Discover Saudi) and its Hajj & Umrah B2B operator (Mawasim), will now fall under the umbrella of Almosafer. This travel platform will collectively capture domestic, inbound, and religious opportunities.
The signing of the Term Sheet is a strategic milestone in Seera’s group pioneering transformation plan announced in 2017, to strengthen the group’s businesses and enhance long-term value for shareholders.
Almosafer aims to use the capital infusion to scale its inbound, outbound, religious and domestic tourism operations, to strengthen its credentials as a national champion of travel and tourism services in Saudi Arabia.
|Memorandum Signing Date||2022-09-12 Corresponding to 1444-02-16|
|Counterparty||The Public Investment Fund|
|Memorandum Subject||– The re-organisation by Seera of its subsidiaries operating its travel and tourism business (consumer travel, business travel, destination management and Hajj and Umrah) to be held by Almosafer.
– The subscription by PIF (or an entity wholly owned by PIF) to newly issued ordinary shares representing 30%, on a fully diluted basis, in the share capital of Almosafer against a subscription amount of up to One Billion and Five Hundred and Fifty Four Million Saudi Riyals (SAR 1,554 million), including an earn-out amount, which will be subject to PIF’s due diligence and the application of debt, debt-like and other adjustments at completion of the transaction.
– The PIF investment amount (including the earn-out amount) is based on a preliminary pre-money enterprise value of Almosafer and the relevant subsidiaries of Three Billion and Seven Hundred and Fifty Million Saudi Riyals (SAR 3,750 million).
– A portion of up to SAR 386 million of the total consideration represents an earn-out amount which will be conditional on certain pre-agreed KPIs which Almosafer must achieve in the financial years 2023 and 2024.
– The transaction is subject to obtaining regulatory and any other approvals as may be required by the parties.
– Signing of the definitive agreements will be subject to a number of conditions including the completion of a customary due diligence exercise by PIF.
– The term sheet also includes other customary provisions that are legally binding, such as in respect of confidentiality, exclusivity, costs, and other matters.
– Should the transaction proceed, Almosafer intends to use the subscription amount for funding growth and expansion programs in relation to its business by, amongst other things, investing in tourism assets and products (including technology) and enhancing customer and inbound tourists experiences.
|Memorandum Duration||The term sheet will be effective as of 09/05/1444H (corresponding to 12 September 2022G) and will terminate upon the earlier of: (i) the parties’ execution of the definitive agreements; (ii) delivery of written notice from one party to the other party; or (iii) the parties’ mutual written agreement.|
|Related Parties||The proposed transaction does not include any related parties.|
|Financial Impact||No material financial impact is expected as a result of the term sheet.|
|Additional Information||Other than certain customary boilerplate provisions such as confidentiality, exclusivity, costs and governing law, the term sheet is not legally binding, and any material developments regarding the term sheet or the proposed transaction it concerns will be announced in due course.|