ADNH Catering Buys Additional Stake in Compass Group

ADNH Catering, a leading food and support services group in the UAE and the GCC, said that it has entered into a Sale and Purchase Agreement (SPA) for the acquisition of an additional 20% equity share in its Saudi Joint Venture from Compass Group.

Completion of the transaction is subject to regulatory requirements and is expected to occur in the first quarter of 2025, ADNH catering said in a disclosure with Abu Dhabi Securities Exchange (ADX) where its shares are traded.

Under the terms of the SPA, ADNH Catering Group will acquire an additional 20% equity stake in the Saudi Joint Venture, thereby increasing its shareholding from 30% to 50%. Al Rushaid Group will hold the remaining 50% equity stake.

Along with entering into the SPA, ADNH Catering entered into a shareholder agreement with Al Rushaid Group whereby the Group will manage the Saudi Joint Venture and have control over its operations.

Accordingly, the Saudi Joint Venture’s financial position and results of operations will be consolidated in ADNH Catering’s financial statements post-completion of the transaction.

The compelling macroeconomic growth story in Saudi Arabia makes it an attractive market for ADNH Catering Group, and the growth of its operations in the Kingdom is a key pillar of its strategy.

Solutions currently offered by the Saudi Joint Venture in the Saudi market are predominantly in the food services segment, complemented by support services. ADNH Catering Group believes that Riyadh, as the Kingdom’s largest and most rapidly expanding city, and the high-growth private healthcare sector represent especially compelling opportunities to increase market share in the Kingdom.

The Saudi Joint Venture dates back to 2012 and has seen healthy business growth, with the number of clients served growing by 17% from September 2021 to September 2023.

In building on this momentum, ADNH Catering Group plans to leverage its specialised know-how, extensive experience, reputable client portfolio, and impressive track record across the sectors it serves in the UAE to expand its operations across various business segments and provinces in the Kingdom, including Riyadh.

Expanding Saudi Operations

ADNH Catering Group CEO Clive Cowley said that the transaction marks an important milestone for his company’s business, maintaining momentum in the execution of their strategy as set out at the time of the company’s IPO, which was successfully completed on 23 October 2024.

He said that with the increase of our equity share in the Saudi Joint Venture, they were seeking to build out from their market-leading position in the UAE to expand ADNH Catering Group’s operations across various business segments and provinces in the Kingdom, including Riyadh.

“The SPA entered into with Compass Group to acquire an additional 20% equity stake in the Saudi Joint Venture within a month of completing our IPO is a testament to our clear and unwavering resolve to expand our operations in the Kingdom in pursuit of business growth and shareholder value creation,” he added.