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Abu Dhabi, UAESaturday 21 July 2018

Exclusive: Abu Dhabi’s VPS Healthcare in IPO talks, eyeing London listing

Company targets shift from “bricks and mortar hospitals” towards healthcare technology

Shamsheer Vayalil, chairman of Amanat, says the company is scouting for more deals to capitalise on collapse of Abraaj. Reem Mohammed / The National
Shamsheer Vayalil, chairman of Amanat, says the company is scouting for more deals to capitalise on collapse of Abraaj. Reem Mohammed / The National

Abu Dhabi-based VPS Healthcare is planning an initial public offering as it looks to tap new markets such as Saudi Arabia and expand into data-driven preventive health care, its chairman said.

“We have IPO plans. This is a hot topic and we will announce it very soon,” Dr Shamsheer Vayalil, also managing director of VPS, told The National.

“The drivers [for IPO] are our aspirations to grow internationally. We want to be a homegrown brand that competes globally – we want to be the Emirates and Etihad of healthcare,” he said, referring to the UAE’s flag carriers.

The company has appointed advisors to plan a potential IPO on the London Stock Exchange – where rival UAE healthcare provider NMC Health is listed.

Dr Vayalil declined to share when the sale would take place or the size of the offering.

Healthcare providers in the Arabian Gulf are expanding as population increases and the cost of treatment edges higher. The GCC healthcare market is forecast to grow at a compound annual growth rate of 12.1 per cent to reach $71.3 billion by 2020 from $40.3bn in 2015, according a report by Dubai-based investment bank Alpen Capital.

To expand their operations, healthcare providers are targeting acquisitions. In 2016, VPS had bid to acquire Abu Dhabi’s Al Noor Hospitals, which was bought by South Africa’s Mediclinic International.

VPS Healthcare, which manages the UAE’s Burjeel hospitals, has a network of 22 hospitals and 125 clinics across the Middle East and India.

It plans to invest around $300 million into India – a key growth market – in 2018 and 2019, and around $150m in the GCC this year, Vayalil said.

The strategy could include new partnerships, start-ups and acquisitions, although “there are not too many good companies for us to acquire at present”.

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Dr Vayalil says he is also interested in doing business in Saudi Arabia, where VPS is not operational. The company is in talks with several parties to enter the market, though not necessarily through VPS. “This is a great area of investment,” he said

Dr Vayalil, who is also vice-chairman and managing director of Dubai-listed healthcare and education investment firm Amanat, is keen on investment in medical technology and data analytics.

. The company is identifying opportunities to pool and utilise the data it collects from its conventional business to build preventive healthcare strategies for patients.

“My vision in the next five years is to move away from providing conventional bricks and mortar hospitals to becoming a data company, to ensure our stakeholders don’t just come to us when they’re sick, but are living healthily,” he said.

In January, VPS signed a 10-year deal with New York Stock Exchange-listed health technology company Royal Philips, part of Philips, to install next-generation electronic medical record software in its hospitals and clinics.

Also last month, VPS launched a medical coding company in India, Dynamed Healthcare Solutions, which translates healthcare diagnoses, procedures and other data from patient records across its portfolio – including in the GCC – into alphanumeric codes.

Dr Vayalil hopes to establish a research and development centre in India (“where there is a large talent pool”) to analyse the patient data and come up with mechanisms for mitigating

healthcare risks.

"We have a very expensive set of information and if we use it right, it will be very valuable for people," he said.

Med-tech and preventive healthcare are increasingly attractive areas of investment in the Middle East due to rising demand for healthcare provision.

The region also suffers from high rates of chronic illnesses including cancer, heart disease and diabetes.