NMC acquires majority stakes in Saudi hospitals
January 22, 2018 | 11:59 AM
by Times News Service
Prasanth Manghat. - Supplied picture

Muscat: NMC, the leading private healthcare chain in the United Arab Emirates, has acquired a 70 per cent stake in CosmeSurge, an industry leader in providing quality cosmetic surgery and aesthetic medicine, and related businesses for $250 million. The business is expected to deliver 2017 revenues and earnings before interest, taxes, depreciation and amortisation (EBITDA) of approximately $67 million and $20.5 million, respectively.

The consideration will be settled in cash and the transaction is expected to be completed in the first quarter of 2018. Assets being acquired under the transaction include 17 operational clinics. Additionally, a 10-bed hospital and two new clinics are currently under construction in the UAE, which are scheduled for opening during the first half of 2018, said a company release.

NMC currently provides invasive cosmetic procedures and complex surgeries and the addition of CosmeSurge will substantially enhance the company’s cosmetics and aesthetics offering. Having managed CosmeSurge and related businesses since September 2017 under an operation and management contract, NMC has already identified a wide number of revenue and cost synergy opportunities. These include cross-referral of patients, reduced capex requirement from leveraging NMC’s existing capacity and cost sharing of support services related to human resource, information technology and procurement.

CosmeSurge and related business have been acquired from Emirates Healthcare Group. Emirates Healthcare Group is majority controlled by KBBO Group, a consortium of private investors in Abu Dhabi with a portfolio of interests across a variety of sectors.

NMC has also acquired an 80 per cent stake in Al Salam Medical Group, a healthcare company in Riyadh, the largest healthcare market in Saudi Arabia. The transaction is expected to be completed in the first half of 2018 and includes the 100-bed Al Salam Medical Hospital, the Al Salam Medical Centre and the Ishbilia Medical Centre.

Al Salam Medical Group’s hospital and clinics focus on a number of key specialties, including cardiology and pediatrics. NMC also sees an opportunity to add substantial value to the acquired assets by introducing further specialties and sharing best practices. As such, NMC plans to add long-term care, cosmetics and IVF services, post the completion of the acquisition.

Operations and management contracts

NMC has also signed new operations and management (O&M) contracts with Emirates Healthcare Group to manage its Egyptian hospitals, Dar El Fouad and As Salam International, which have a combined capacity of 860 beds. The contract will generate revenues of $2 million for NMC in the first year of operation.

“These value accretive and earnings enhancing transactions fit well with our growth strategy. CosmeSurge represents a continuation of building NMC’s capabilities and Al Salam further extends our geographic footprint in the KSA, cementing our leading position as a non-domiciled provider,” said Prasanth Manghat, Chief Executive Officer of NMC. “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. Moreover, Saudi Arabia remains a key focus market for us and despite already reaching 800 beds across existing and under-construction assets in the country, we continue to see strong growth opportunities in the Kingdom.”

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