Dubai-based education and healthcare company Amanat Holdings is assessing the purchase of a stake in the Middle East operations of Abu Dhabi-headquartered VPS Healthcare as it looks to expand its GCC operations.
Amanat said the transaction, which is in line with its strategy to grow and scale profitably within the region, could help consolidate its position within the healthcare industry.
The company did not disclose the size of the stake. The potential deal is still in the early stages and dependent on securing necessary approvals. It has appointed JP Morgan as financial advisor on the transaction.
Founded in 2007 by Dr. Shamsheer Vayalil, VPS Healthcare is one of the UAE’s more diversified healthcare firms. It operates more than 20 hospitals and 125 medical centres across the Middle East and India. VPS also runs a UAE integrated pharmaceutical firm known as Lifepharma and a pharmacy chain based in Abu Dhabi.
Mr Vayalil, who is also the vice-chairman and managing director at Amanat, will not be a part of the discussions related to the deal, the company said addressing concerns of conflict of interest.
Amanat is hoping that a stake in VPS could help it tap a booming healthcare industry within the GCC, which it expects to grow at a compound annual growth rate of 6.7 per cent by 2022. Amanat forecasts that growth will be supplemented by government spending in the sector which is set to grow to $30.5 billion (Dh112bn) by 2021.
“Such fundamentals support Amanat to build long-term value for shareholders through a combination of scale, synergy and expertise when the right opportunity is presented,” the Dubai-based healthcare firm said in its statement.
Amanat's chief executive Tristan de Boysson told The National in November the company plans to invest between Dh800 million to Dh900m in the GCC and Egyptian markets over the next few years.
At the time, the company said that it had Dh536 million in cash that could be deployed into its target markets and said it planned to raise a further Dh300m-Dh400m through bank loans.
Amanat, which listed in 2014, reported a 38 per cent year-on-year rise in net profit to Dh33.4m in the first nine months of 2019. Revenue reached Dh89.3m during the period and operating income rose to Dh22.51m, from Dh4.6m in the same period a year earlier.
The company said income rose mainly as a result of investments in the education sector.
