Gulf Islamic Investments is investing close to $530 million for a majority stake in Saudi Arabian healthcare operator Almeswak as part of its push for a more than threefold increase in its asset to $10 billion in next five years, its co-chief executive said.
GII, a UAE-based Sharia-compliant alternative investment manager, is looking to invest across the GCC, the US, the UK, Western Europe and India, Pankaj Gupta told The National.
Real estate, food, logistics, technology, health care, consumer, retail and investments in fast-growing start-ups across the regions will help the company grow its asset base from the current $3bn.
“The way we are looking at business, for sure, we should be anywhere in excess of $5bn in the next three years. In four to five years, I think we should be touching somewhere around $10bn,” Mr Gupta said.
The company, which is heavily invested in the commercial real estate and owns a large portfolio of logistics and warehousing assets in Europe and the GCC, plans to invest more than $1bn in Saudi Arabia and India.
In Saudi Arabia, the company plans to invest $750m to $1bn in the next three years depending on the market situation but “we are very excited about the opportunities we are evaluating”, Mr Gupta said.
Economies in the Middle East and North Africa have rebounded strongly from the pandemic and are expected to grow 5.2 per cent in 2022, the fastest rate since 2016, boosted by higher oil prices, according to a recent World Bank report.
The continued economic momentum has also restarted merger and acquisition activity in the region.
The value of M&A deals in Mena jumped 11 per cent to $21bn in the first quarter of this year, with deals valued at under $500m reaching $4.6bn this year, marking the strongest start to a year since records began in 1980, according to data by Refinitiv.
The UAE was the most active in terms mergers and acquisitions, which rose 5 per cent to $4.3bn this year, while Saudi Arabia attracted the most M&A capital, worth $47.4bn, according to Refinitiv report.
The deal to buy a stake in Almeswak, the largest dental and dermatology chain with more than 80 centres in 25 cities in the kingdom, is part of GII’s push to expand its portfolio of investment into the region’s biggest economy.
GII is buying a 51 per cent stake in Almeswak, which was previously 70 per cent owned by Riyadh-based private equity company Jadwa Investment and 30 per cent by UAE-based healthcare investment company United Eastern Medical Services. After the deal, Jadwa will become a minority shareholder with 49 per cent stake, Mr Gupta said.
“This is our first Saudi deal and we are excited about it. It's a very strong business and, of course, it needs more efficiency and that's the reason why GII has come in as the lead investor,” he said.
“The objective is to expand, take it beyond Saudi Arabia, so we would be making some organic and inorganic growth in the other GCC countries.”
GII, which is heavily invested in the healthcare sector in South-East Asia, plans to float shares of Almeswak on Saudi Arabia’s bourse in two to three years once it scales the business, as it has “a huge potential to become a very good public-listed company”.
Apart from scouting more deals in the healthcare sector, GII is looking for investment opportunities in logistics, food and financial services sectors of Saudi Arabia. It is currently looking at 12 to 15 potential deals and partnerships, and expects to close a “couple of chunky deals in the next 18 months”, Mr Gupta said.
“I think we are very close to sign[ing] a big deal on cloud Kitchen,” he added, declining to give details of the potential transaction.
GII, which primarily invests through its private equity, real estate and venture capital platforms, has a strong overall pipeline of deals in all three asset classes and expect to close at least six to 10 deals by the end of next year.
"We will be doing a few real estate deals. And, of course, we are looking at [our] growth portfolio in India.”
The company has raised and fully invested more than $100m in India through its India Growth Portfolio One and Two funds and it soon plans to raise the third fund of around $250m to invest in consumer and consumer-tech among other sectors.
With investments in the food and logistics sectors in the UAE, GII is looking to acquire healthcare businesses in its home market to become part of Almeswak. It also plans to invest in at least 15 start-ups through its $50m technology fund, Mr Gupta said.