EFG Hermes completes M&A deal in Saudi healthcare market

Egyptian investment bank EFG Hermes said on Tuesday it had concluded advisory on a joint venture agreement signed between UAE’s NMC Healthcare and Saudi Arabia’s Hassana Investment Company.

Hassana Investment is the investment arm of Saudi-based General Organization for Social Insurance (GOSI), one of the largest pension funds in the world by assets under management. NMC is a UAE healthcare leader listed in the London Stock Exchange.

EFG Hermes was joint advisor on the deal, and the sole execution broker for NMC Healthcare and Hassana Investment Company.

The transaction, which closed on Monday, entails a 53 percent ownership by NMC Health plc through NMC’s contribution of its five assets in Saudi Arabia and an additional cash injection of 250 million Saudi riyals ($66.6 million).

The joint venture will be one of the largest healthcare operators in Saudi Arabia, in terms of number of beds. GOSI will own through its wholly-owned subsidiary a 47 percent stake in the joint venture through its contribution of its 38.88 percent stake in the Tadawul-listed National Medical Care Company (Care) at 54.00 riyals per share.

The joint venture has acquired an additional 4,629,808 shares of Care, representing 10.3 percent of its share capital, bringing the aggregate shareholding of NMC in Care to 22,066,901 shares, or 49.2 percent of its share capital.

The deal is EFG’s first M&A transaction in Said Arabia, a reflection of the its strategy to ramp up its business in the Kingdom, said co-CEO Mohamed Ebeid.

“Our focus on Saudi Arabia’s potential has resulted in our brokerage market share doubling year-on-year, as well as bracing the Firm’s sell-side business for heavy inflows into the market.” Ebeid said.

Having completed the advisory on one of Saudi Arabia’s largest IPOs, EFG anticipate it would be seeing a significant pickup in activity throughout the kingdom, its co-head Mohamed Fahmi said.