Saudi Vitrified Clay Pipes Co. (SVCP) signed on Jan. 8 a non-binding memorandum of understanding (MoU) with the shareholders of Advanced Piping Solutions to acquire 75% of the latter’s shares for a cash consideration.
The 90-day MoU, which came into effect immediately, could be renewed, SVCP said in a bourse statement on Thursday.
Under the preliminary deal, both parties agreed to assess the equity of Advanced Piping at SAR 85 million. The value will be reduced if the existing shareholders make equity drawdowns.
An adviser will be hired to conduct the required due diligence and negotiations for signing a binding purchase agreement, SVCP added.
The acquisition aims to diversify SVCP’s products and markets, and introduce new products of fiberglass and concrete pipes.
SVCP hired House of National Consulting as financial adviser for the deal, which is pending the final approval of the company’s board and the competent regulatory authorities.
Any material developments will be disclosed later on, the company said, adding that no related parties are involved in the deal.
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