Foundation Holdings, the healthcare and education investment specialist firm that counts Air Arabia founder Adel Ali among its shareholders, is negotiating the acquisition of a nursery operator in the UAE, as it weighs more deals as part of plans to deploy Dh2 billion by 2021, its founder said.
"We had a phenomenal 2017 and this year promises to be even better," Abhishek Sharma, who is also the chief executive of Foundation Holdings, told The National in an interview in Dubai. "We are on track to achieve our Dh2bn deployment target in five years [from 2016] and could even reach it sooner."
The company is in advanced talks to buy the UAE operations of an international pre-school education provider in a three-party deal to establish the largest chain of affordable nurseries in the GCC, Mr Sharma said. A memorandum of understanding has been signed and the transaction is expected to conclude by the end of September, he added.
Mr Sharma is a former head of education investments at Dubai-based Amanat Holdings and a former principal at Ithmar Capital, where he led the London listing of Abu Dhabi healthcare provider Al Noor Hospitals Group in 2013.
His firm invests on behalf of six family offices across the Arabian Gulf, each with a shareholding of around 10 per cent. The stakes of the company chairman Murtadha Ahmed Sultan, who is also a director of Omani engineering firm Towell Group, and the Sharma family, come to a combined 37 per cent, according to Indian media reports.
Formed in November 2016, Foundation Holdings aims to make long-term investments through a “buy it, build it, list it” model – acquiring companies to create a new operating platform that in turn makes smaller investments to build its business. The focus is the healthcare and education sectors in the GCC and India. Both sectors are high-growth segments that are attracting rising interest from investors like Foundation Holdings and private equity firms as the population soars and the cost of medical treatment and schooling rises, boosting demand for affordable services.
The company has committed Dh1.5bn of its Dh2bn target to date, though not all of that amount has been deployed, Mr Sharma said.
Last April, it formed a Dh1bn venture called One Living with UAE real estate developer Bloom Holding to develop accommodation for teachers and doctors at different locations in the UAE, including Abu Dhabi’s Saadiyat Island.
In January, Foundation Holdings set up a ‘value healthcare’ operator called Right Health, after acquiring 31 healthcare facilities operating under providers including Ruby Clinic and Group, Class Medical Centre and BioHealth Diagnostic Centre. The Dh500m venture aims to provide medical services to the lower-income segment of the population, and in May acquired three clinics and a pharmacy from Mediclinic Middle East.
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The plan is to list Right Health “within three to five years” in Dubai or Abu Dhabi once it reaches a target of serving one million patients in the UAE, and it is eyeing more acquisitions to achieve the goal. “We are very bullish about the value healthcare sector and see a huge pipeline of opportunities in clinics, laboratories and pharmacies,” Mr Sharma noted.
The idea behind the nursery acquisition is also to create a “market leader” in the affordable pre-school education segment, before listing it to fuel further growth, he added. The size of the total investment would be similar to the Dh500m commitment to build the Right Health platform.
“Right now the pre-school space is extremely fragmented. Regulations are coming in and there is more emphasis on quality, yet there is no ‘go-to’ brand. For us it’s about creating a brand people [can] trust and believe in,” Mr Sharma said. “The intention is to partner with a leading local firm and bring in a world-class operator to consolidate and build the platform alongside us.”
Currently, Foundation Holdings’ investments are concentrated in the Arabian Gulf but it intends to achieve a 50:50 split between the GCC and Indian markets within the next decade to diversify and spread risk.
In India, the company is in talks to acquire an established healthcare provider specialising in eye treatments, and list it on the country's bourse next year, he said, without giving the name of the target company or the size of the potential investment.
The firm sees particular growth opportunities in the prevention and treatment of diabetes-related diseases in the GCC and India – where almost 10 per cent of the population is expected to suffer from diabetes by 2030, according to the International Diabetes Foundation.
