Elm Acquires Thiqah Business Services from PIF in $907m Transaction
Overview of the Deal
Acquirer: Elm Company (Tadawul: 7203)
Target: Thiqah Business Services Co.
Enterprise Value (EV): SAR 3.4 billion (~$907m)
Transaction Type: 100% acquisition
Closed Date: April 21, 2025
Target Advisors: N/A
Acquirer Advisors: N/A
Announced: January 21, 2025
Elm Co. has completed the acquisition of the Public Investment Fund’s (PIF) entire stake in Thiqah Business Services, marking one of the largest Saudi ICT-sector transactions of 2025. The deal, valued at SAR 3.4 billion ($907 million), was funded through a mix of Elm’s own resources and financing facilities, with no preferential terms.
This transaction, considered a related-party deal, received shareholder approval on March 17, 2025, as PIF is a substantial shareholder in Elm. Board members Raed Ismail and Abdullah Al-Salem, who have an indirect interest in the acquisition, were also cleared by the ordinary general assembly.
The acquisition underscores Saudi Arabia’s Vision 2030 mandate to strengthen local ICT capabilities, foster digital transformation, and enhance national champions. Elm highlighted that the deal will maximize the local value chain, drive innovation, localize technology, and enhance technical skills across the Kingdom’s economy.
“This is an important transaction for Elm, as it enhances integration, rationalizes spending, increases profitability, and provides qualitative advantages for both parties and the market.” – Mohammad Abdulaziz Alomair, CEO of Elm
Company Details (Acquirer – Elm Co.)
Elm is a leading Saudi digital solutions and technology company specializing in IT, cybersecurity, data services, and digital platforms. A majority-owned subsidiary of PIF, Elm plays a pivotal role in enabling government and private sector digital transformation across the Kingdom.
Headquarters: Riyadh, Saudi Arabia
CEO: Mohammad Abdulaziz Alomair
Founded: 1988
Ownership: Majority-owned by PIF
Market Cap: SAR 66.99 billion (as of Q1 2025)
Enterprise Value (EV): SAR 66.66 billion
LTM Revenue: SAR 8.12 billion
LTM EBITDA: SAR 2.38 billion
LTM EV/Revenue: 8.21x
LTM EV/EBITDA: 28.01x
Presence: National ICT and government solutions provider with expanding private sector footprint
Recent Transactions: N/A (this is Elm’s largest deal to date)
Company Details (Target – Thiqah Business Services)
Thiqah Business Services specializes in smart technology solutions for business services and digital platforms, with a client base spanning both government and private sectors. Prior to the transaction, Thiqah was fully owned by PIF.
Headquarters: Riyadh, Saudi Arabia
Founded: 2011
EV: SAR 3.4 billion
Projections and Assumptions
Short-Term Consequences
The financial impact of the acquisition will be reflected in Elm’s Q2 2025 results. In the near term, the acquisition may weigh on Elm’s cash flow due to financing facilities used in funding the deal. However, management expects cost rationalization, integration efficiencies, and economies of scale to partially offset these pressures.
Strategically, the acquisition enhances Elm’s digital solutions portfolio by consolidating Thiqah’s smart business services with Elm’s e-government and cybersecurity offerings. This positions Elm as a more integrated ICT champion, capable of delivering advanced national smart services with greater efficiency.
Long-Term Upsides
National Champion Role: The deal cements Elm’s position as Saudi Arabia’s premier ICT leader, reinforcing its role in Vision 2030 digital transformation.
Synergies & Integration Benefits: Combining Thiqah’s platforms with Elm’s services unlocks opportunities for cost rationalization, higher profitability, and operational efficiency.
Broader ICT Ecosystem: The acquisition accelerates the localization of high-tech skills, job creation, and technology transfer, enabling Elm to lead digital innovation across sectors such as healthcare, transport, and financial services.
Strategic Timing: By acquiring Thiqah directly from PIF, Elm consolidates national digital resources under a single entity, enabling economies of scale and strengthening Saudi Arabia’s ICT value chain.
“PIF’s sale of Thiqah to Elm will contribute to enhancing the vital role of the ICT sector and will strengthen efforts to localize technology and drive innovation.” – Shahd Attar, Head of Technology & Media, PIF
Risks and Uncertainties
Integration Challenges: Merging Thiqah’s operations into Elm may create short-term disruption, especially in harmonizing overlapping service portfolios.
Leverage & Financing Risk: While the acquisition was partly financed through internal resources, reliance on facilities could pressure cash flows if synergies take longer to realize.
Demand Dependence: Growth in ICT spending is heavily tied to government initiatives; a slowdown in public-sector projects could impact revenue projections.
Governance Considerations: As a related-party transaction involving PIF, ongoing scrutiny around transparency, governance, and minority shareholder protections will remain high.
Conclusion
Elm Co. is a strategically critical player in Saudi Arabia’s digital ecosystem and a highly attractive potential M&A target. Its government-backed position, robust financials, and alignment with Vision 2030 make it a cornerstone in the Kingdom’s ongoing digital transformation journey.
While its high valuation multiples reflect significant investor confidence, they also represent a hurdle for acquirers seeking entry. Nonetheless, Elm’s combination of stability, growth, and strategic importance makes it a prime candidate for long-term investment or partnership opportunities.
