London-listed healthcare provider is tapping $800m warchest to expand in the Arabian Gulf
NMC buys remaining stakes in UAE and Saudi Arabia medical facilities for $218m
London-listed NMC Health acquired remaining stakes in two hospitals in the UAE and Saudi Arabia that it partially owns for a combined investment of US$218 million, as the healthcare provider continues to expand in the Arabian Gulf region.
NMC bought the 49 per cent stake it does not already own in Fakih IVF facility in Dubai for $205m and an outstanding 30 per cent stake in As Salama hospital in Saudi Arabia, the company said in a statement.
"In December 2017, I set out our strategy to drive the company's next phase of growth,” said NMC chief executive Prasanth Manghat. “The transactions today fit with our commitment to increase our capacity, capabilities and geographic coverage.”
NMC said in December it is looking to invest $800m in the Arabian Gulf and beyond from 2018 as it banks on sector growth because of privatisation of the healthcare sector in Saudi Arabia and the roll-out of mandatory health insurance in Dubai and Oman.
The company's $800m "war chest" includes $500m from cash and funded facilities and $300m from the company’s balance sheet. The company said it would also consider issuing a bond to help fund any acquisitions.
The Fakih IVF facility will be paid 27 per cent in cash and 73 per cent in NMC shares via the issuance of 3.5 million shares based on its Wednesday closing price of £29.2 a share. The As Salama hospital transaction will be paid in cash.
"The acquisition of the outstanding minority stakes in Fakih IVF and As Salama hospital represent highly value accretive transactions for NMC's shareholders,” said Mr Manghat. “In particular, the Fakih IVF transaction provides us with an enhanced platform from which to grow our fertility business. As the second largest global IVF player, NMC remains very well positioned to be the leading consolidator in the fertility market."
NMC’s main business has historically been within the UAE, where it has built and managed some of the country’s oldest hospitals for the last three decades.
However, the company said last month it seeks to expand outside the GCC to other emerging markets. The healthcare provider also said it wants to expand its fertility treatment business globally, and add new healthcare “verticals” focusing on under-served segments in the GCC.
NMC posted a 39 per cent rise in first-half profits in August, boosted by income from its acquisition of the Al Zahra Hospital in Sharjah for $560m in February.