NMC Health acquires ProVita to reinforce long-term care business

NMC Health is expanding its footprint in the long-term care segment with a US$160.6 million acquisition.
In an all-cash transaction, the Abu Dhabi company has bought ProVita International Medical Center, which has facilities in Abu Dhabi and Al Ain, from the Dubai private equity firm TVM Capital Healthcare Partners, the Saudi conglomerate Olayan Group, Al Zarooni Emirates Investment in Dubai and other minority shareholders.
This is the first acquisition using the $475m loan NMC Health raised this year.
"[NMC] is reaching the end of a three-year organic growth strategy and is now pursuing an acquisition strategy, not only to add earnings but also to have a strategic benefit - expanding the service offering or strengthening a particular regional presence," said Charles Weston, the director of healthcare equity research at Numis Securities. "All of NMC's four acquisitions announced this year meet these criteria, including ProVita."
NMC shares were at £7.89 each in midafternoon trading in London, up 1.15 per cent from Friday's close on the London Stock Exchange.
ProVita, which has 90 long-term care beds, expects to add 30 more in Abu Dhabi by the third quarter.
The acquisition will plug "the service gap between acute short-term care provided by NMC's existing facilities and home-care service provided by the recently acquired Americare Group", said BR Shetty, the executive vice chairman and chief executive of NMC Health.
ProVita also expects to expand into Saudi Arabia and Qatar.
In April, NMC said it would acquire 90 per cent of Americare for $33m. Americare provides home-based services such as IV infusion therapy in Abu Dhabi.
ProVita, which is expected to retain its management team, generated an adjusted net income of $10.7m for the 12-month period to March 31, and had a net cash position of $1.3m during the same period. It employs 383 people.
With the acquisition, NMC expects to free up beds at its intensive care units in Abu Dhabi and Al Ain occupied by long-term acute and subacute care patients. Long-term care, such as post-surgery or post-trauma rehabilitation and respiratory diseases, is primarily taken care of using public hospitals' critical care beds, while some private hospitals also chip in.
In the private sector, there are few long-term care providers apart from ProVita.
The long-term care segment is expected to grow in line with the elderly population, which is expected to represent 8 per cent of the overall population by 2050, said Ahmed Faiyaz, the transaction advisory services health care leader for EY in the Middle East and North Africa.
Expatriates investing in property and retiring in the UAE will contribute to that situation. With the ageing will come increases in injuries, elevated incidences of genetic disorders and saturation of ICUs, he said.
About 58 per cent of ProVita's patients are referred from Seha hospitals in Abu Dhabi and Al Ain, 21 per cent are repatriated from abroad and the rest of the patients are referred through other UAE hospitals.
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