AfroCentric buys Denis Group for R250m

Acquisition to be utilised to reduce debt. It is now the most diversified group in the healthcare sector on the JSE

THE AFROCENTRIC Group, South Africa’s largest health administration and medical risk management solutions provider, has acquired Dental Information Systems Holdings (Denis Group), for R250 million to diversify its offerings in the healthcare sector.

AfroCentric is acquiring the dental benefit management company from EOH Holdings subsidiary EOH Abantu.

The information technology group said the sale of Denis was in line with its strategy of selling non-core assets as it seeks to right-size the organisation. EOH had set itself a target of achieving a total value of disposals of R1 billion in 2019, and said it has exceeded its target with the disposal of Denis.

“The proceeds of the sale received by EOH Abantu will primarily be utilised to reduce debt. The transaction is in line with EOH’s balance sheet deleveraging strategy and is expected to strengthen the capital structure of the EOH Group,” EOH said.

Denis owns health companies such as Medscheme, pharmaceutical distributor Pharmacy Direct, drug manufacturer Activo and several other health-related companies. It is one of only three managed care organisations accredited by the Council for Medical Schemes that specialise exclusively in dental benefit management.

AfroCentric Group chief executive Ahmed Banderker said in the past few years AfroCentric has made a number of strategic and targeted acquisitions to diversify the group.

“We are now the most diversified group in the healthcare sector on the JSE. This positions us favourably to innovate and to be competitive in the various sectors we operate. This acquisition of Denis enables us to focus specifically on cost reduction and innovation in the dental treatment offerings to medical scheme members,” Banderker said.

The transaction was subject to a number of conditions, including the Competition Commission unconditionally approving the transaction.

Banderker said as part of AfroCentric’s offerings in the administration of medical schemes, the acquisition gives the group, particularly subsidiaries such as Medscheme, the capability to provide clients with comprehensive dental management solutions, which it is not currently in a position to do.

“The acquisition also means that the AfroCentric Group now plays in all segments of healthcare, except the facilities or hospital sector, with a focus on three main areas of health administration, pharmaceuticals and corporate or workforce support,” Banderker said.

Denis was established in 1996 and has a substantial market share. It is the only specialised dental benefit manager unaligned to AfroCentric’s competitors.

At the end of July, Denis had net assets valued at R145.42m. It profit after tax attributable to net assets was R34.82m.