NMC Health ramps up expansion in Kingdom
UAE group invests more than $200m in two businesses
LONDON: NMC Health, the UAEbased hospital operator, has snapped up two businesses for more than $200 million as it looks to expand into Saudi Arabia.
The acquisitions also reflect the company’s ambitions to increase its presence in the Gulf region’s lucrative cosmetic surgery sector.
The London-listed health care provider has acquired a 70 percent stake in CosmeSurge, a chain of 17 cosmetic clinics, and an 80 percent stake in the Riyadh-based Al Salam Medical Group.
“We see substantial opportunities for revenue and cost synergies across both acquisitions, and the cosmetics business in particular has the potential to be further developed into an independent business vertical at a later stage,” said NMC CEO Prasanth Manghat, in a statement released to the London Stock Exchange.
“Moreover, KSA remains a key focus market for us and despite already reaching 800 beds across existing and underconstruction assets in the country, we continue to see strong growth opportunities in the Kingdom,” he said.
CosmeSurge is to be acquired from the Emirates Healthcare Group, which is majority owned by KBBO Group, a consortium of private investors in Abu Dhabi.
NMC said it paid $170 million for the stake, and the deal includes a 10-bed hospital and two new clinics currently being constructed in the UAE and due to open in the first half of this year.
NMC invested $37 million in Al Salam plus a deferred sum based on the company’s business performance after a year. The acquisition includes a 100-bed Al Salam Medical Hospital, the Al Salam Medical Center and the Ishbilia Medical Center. The group’s hospitals specialize in cardiology and pediatrics. Following the acquisition, NMC plans to add long-term care, cosmetics and IVF services.
NMC is one of many private health care companies keen to move into the Kingdom to capitalize on the Saudi government’s health care privatization plans.
It first secured a foothold in the Kingdom in 2016 after acquiring a 70 percent stake in As Salama Hospital in Alkhobar.
Last September, the company received regulatory approval for the first greenfield health care facility in Saudi Arabia to be set up by a non-Saudi company, according to a statement to the London Stock Exchange. The “Chronic Care Specialty Medical Center” will be based in Jeddah and is due to be at full capacity in the first half 2019. According to a 2018 Medical Trend Costs report from Aon Hewitt, the costs of employer-backed health care schemes in Saudi Arabia rose by 14 percent last year and are forecast to rise by 13.5 percent this year.
This compares to an anticipated 10 percent increase in the UAE, while the average global increase is 8.4 percent.
The anticipated rise in costs is in part due to the susceptibility of the Kingdom’s population to diseases often related to poor lifestyle choices.
The Aon Hewitt report highlighted high blood pressure, physical inactivity and bad nutrition and high cholesterol as key health risks specific to those living in the Middle East and North African region.
NMC also said it had signed operations and management contracts with Emirates Healthcare Group to manage two Egyptian hospitals, Dar El Fouad and As Salam International, which have a combined total of 860 beds.