Saudi Arabia's Al Babtain Food Company has announced plans to sell its entire 3% stake in Jordan-based Chocolate Lake Company for Chocolate and Confectionery Manufacturing to Dubai International Financial Centre-registered Indulgent Food International Holding Company.

The transaction forms part of Indulgent Food's acquisition of a 70% stake in Chocolate Lake from existing shareholders, stated Al Babtain Food in its filing to Saudi bourse Tadawul.

The total equity value of Chocolate Lake was set at $171 million before adjustments under the sale agreement, it stated. 

According to Al Babtain, it is entitled to 4.29% of the total consideration allocated to the selling shareholders, with the final proceeds to be determined after completion adjustments, costs and other agreed items.

Completion of the transaction is subject to regulatory and competition approvals, lender consents related to the change of control and other customary closing conditions.

The agreement also provides for additional consideration linked to Chocolate Lake's financial performance in 2027 and 2028, based on adjusted ebitda targets. 

In addition, $5 million of the sellers' proceeds will be placed in escrow for three years to cover potential claims under the agreement.

Al Babtain said it expects the transaction to have a positive financial impact, with the final capital gain to be determined upon completion. 

The proceeds would be used to strengthen its financial position and support its business activities and strategic plans, it added.-TradeArabia News Service