Burjeel IPO: UAE healthcare provider may raise as much as $368m from offering

The subscription period for the offering runs from September 30 to October 4 for both retail and professional investors

A medic at Burjeel Hospital in downtown Abu Dhabi holds a dose of a vaccine developed by Chinese drug maker Sinopharm. Victor Besa / The National

Abu Dhabi healthcare provider Burjeel Holdings may raise as much as Dh1.35 billion ($368 million) from an 11 per cent stake sale in the company's initial public offering.

The company plans to sell 550.7 million shares and set the offering share price between Dh2.00 and Dh2.45 a share, implying an equity value of $2.7bn to $3.3bn, it said in a statement on Friday. The final offer price will be determined through a book building process and is expected to be announced on October 5.

The offering includes 350.3 million shares sold by VPS Healthcare Holdings, which owns 79.8 per cent of Burjeel.

The subscription period for institutional and retail investors will open on September 30 and close on October 4. The company's shares will start trading on the Abu Dhabi Securities Exchange on October 10.

On September 19, Abu Dhabi’s International Holding Company, the UAE’s largest company by market value, bought a 15 per cent stake in Burjeel.

Burjeel Holdings, founded in 2007 by Dr Shamsheer Vayalil, has a network of about 61 assets, including hospitals and medical centres, as well as pharmacies and other allied services throughout the UAE and Oman. The company plans to enter Saudi Arabia with investments of up to $1bn planned in the Arab world’s largest economy through joint ventures and public-private partnerships.

Burjeel had revenue of nearly Dh3.4bn in the 2021 fiscal year, representing an 18 per cent compound annual growth rate from 2019 to 2021.

The company plans to pay cash dividends from 2023 onwards, on the expected basis of a payout ratio of 40 to 70 per cent of net income, depending on the required investment for additional growth plans.

In the absence of attractive investment opportunities it will distribute dividends at the upper end of the payout ratio range or potentially higher, it said.

The first interim dividend is expected to be paid in the second half of 2023 on the basis of net income for the first half of 2023.

Dubai Islamic Bank is the lead manager on Burjeel's IPO, while First Abu Dhabi Bank is lead receiving bank and International Securities is acting as financial adviser. JP Morgan is acting as capital markets adviser to the company and selling shareholder.