The Dubai healthcare company Avivo Group has bought the medical distributor Kalium Group as it prepares itself for an initial public offering early next year.
A unit of the private equity firm Al Masah Capital, Avivo Group has fully acquired Dubai’s Kalium Group for between US$90 million and $100m, said Shailesh Dash, the chairman of Avivo Group.
“It is our biggest deal in health care in the past couple of years,” he said.
The acquisition is also in line with Avivo’s IPO plans. It expects to be listed on the London Stock Exchange early next year, according to Mr Dash.
“We expect to raise between $300m and $500m,” he said. “We have doubled our profits last year, economic conditions are better this year, and Brexit doesn’t make much of an impact, none of the fund managers are moving out of London.”
Pre-IPO bankers for Avivo include Credit Suisse and Deutsche Bank.
Set up in 2006, Kalium Group is a distributor of medical equipment such as laser devices for acne treatment, and skincare products in the Middle East. It also operates four medical aesthetic clinics under the Aesthetica and Dermalase brands in Dubai.
With the acquisition, Avivo expects to open an Aesthetica clinic in Abu Dhabi before the end of the year and hire staff for UAE expansion. It also expects to expand the brands in the wider Arabian Gulf later.
“This is a cash business, and with the pressure on insurance companies and the governments, there is a pressure on profitability of healthcare operators and so this is a great business to have,” Mr Dash said.
With the acquisition, Avivo also expects to tap into medical tourism, particularly with cosmetic medicine a focus area of Dubai Health Authority.
“Kalium through its aesthetic clinics has been attracting patients from all over the region,” said Amitava Ghosal, the chief executive of Avivo Group.
Avivo now owns 43 healthcare entities across the Middle East and North Africa, including the National Hospital in Abu Dhabi and Conceive fertility centre in Sharjah.
Last year, Al Masah Capital announced it will invest Dh1.1 billion in Avivo Group ahead of the IPO in 2017.
As more private players are encouraged to enter the healthcare market, spending is also increasing in the UAE. It is expected to touch $19.5bn in 2020, according to an Alpen Capital report in February, up from $10.7bn last year.
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