NMC Healthcare says to deploy $800m ‘war chest’ from 2018

London-listed healthcare firm is eyeing acquisitions and expansion opportunities in the Arabian Gulf and beyond

UAE-based NMC Health said it agreed to buy 100 per cent of the equity of UK-based Aspen Healthcare in its first ever UK acquisition. Silvia Razgova / The National

NMC Healthcare, the UAE’s largest listed healthcare provider, is looking to invest US$800 million (Dh2.94 billion) in the Arabian Gulf and beyond from 2018, it confirmed on Sunday.

“We have an $800m ‘war chest’ available to us and see a lot of assets in the market that make sense for us,” said Prasanth Manghat, the company's chief executive and executive director.

“If you look at healthcare, there’s a shortage of quality of assets, and from a usage point of view there are a lot of assets.”

The privatisation of the healthcare sector in Saudi Arabia as part of the kingdom’s Vision 2030 economic diversification plans, as well as the roll-out of mandatory health insurance in Dubai and Oman, are key drivers of GCC investment opportunities, according to Mr Manghat.

London Stock Exchange (LSE)-listed NMC Healthcare is reported to be in talks with local authorities in Riyadh, Saudi Arabia, to take over management of the cash-strapped Saad Specialist Hospital in Khobar, one of the top cancer treatment facilities in the Gulf, owned by Saudi conglomerate Saad Group.

NMC Healthcare declined to confirm the discussions are taking place, saying it is bound by LSE regulation around announcements.

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"Saudi Arabia is at the cusp of a huge opportunity," Mr Manghat told The National via email. "Not only is the market is opening up with socio-economic reforms but there is this huge demand-supply gap.

“The growth in total population especially in the geriatric and paediatric segment coupled with lifestyle-related diseases and disorders offer us an opportunity and responsibility.

“We are open to all options of cooperation with the [Saudi] government and we also continue to explore the private sector there.”

The company's $800m "war chest" includes $500m from cash and funded facilities and $300m from the company’s balance sheet. The company said it would also consider issuing a bond to help fund any acquisitions.

NMC Healthcare’s main business has historically been within the UAE, where it has built and managed some of the country’s oldest hospitals for the last three decades.

However, in a trading update to the LSE last week, it said it seeks to expand outside the GCC to other emerging markets. The company also said it wants to expand its fertility treatment business globally, and add new healthcare “verticals” focusing on underserved segments in the GCC.

NMC posted a 39 per cent rise in first-half profits in August, boosted by income from it acquisition of the Al Zahra Hospital in Sharjah for $560m in February.