NMC Health has agreed to buy 51 per cent of the Fakih IVF Group to tap the UAE’s booming fertility market.
The Abu Dhabi healthcare company said yesterday that it had agreed to pay Dh696 million for the stake in what is one of the largest fertility clinics in the Middle East, performing more than 4,000 IVF cycles a year.
The deal, which also includes a mechanism by which NMC could increase its stake in privately owned Fakih IVF, comes just over a week after NMC withdrew from the US$2.2 billion bidding contest with Johannesburg-listed Mediclinic to acquire London-listed rival Al Noor Hospitals.
The acquisition of Fakih IVF will boost NMC’s maternity and fertility arm, which already includes the maternity hospital Brightpoint Royal Women’s Hospital and European fertility specialist Clinica Eugin.
Fakih IVF, which generated earnings of $25m in the first nine months of this year, currently operates clinics in both Abu Dhabi and Dubai.
The company has already announced plans to open three more UAE clinics next year in Al Ain, Al Gharbia and Sharjah. More centres are planned in Qatar and Oman before the end of 2016.
NMC said that Dr Michael Fakih, the founder and owner of the business, will remain as a 49 per cent shareholder and managing partner in the business.
Fertility treatment is one of the leading drivers of medical tourism in the UAE and a key growth area for the country. According to Fakih IVF, 25 per cent of its patients in Dubai are medical tourists.
Clinicians say that in the UAE about one in five couples face fertility issues – a higher figure than in other parts of the world. Leading causes of infertility include obesity, diabetes and attempting to start a family later in life.
In Abu Dhabi and Dubai, some clinics can charge as much as Dh45,000 for a single cycle of IVF treatment.
Since NMC floated its shares on the London Stock Exchange in 2012, it has used the increased access to capital to fund an ambitious expansion programme which has helped it to grow its portfolio to 885 beds licensed in the UAE, as well as a network of medical centres and day surgeries.
This year it opened its largest hospital, the 250-bed NMC Royal Hospital in Abu Dhabi.
“Our acquisition of a major shareholding in Fakih IVF is the logical next step towards achieving NMC’s goal of becoming a global leader in maternity and fertility services,” said B R Shetty, the NMC Health chief executive.
“We are particularly excited about growing our in vitro fertilisation service offering within the UAE and look forward to further expand its geographic reach.”
The deal announcement coincides with reports that VPS Healthcare, another UAE hospitals group and the owner of Burjeel hospitals, will make a bid for Al Noor Hospitals before the December 8 deadline set by the UK Takeover Panel.
Analysts have suggested that NMC pulled out of the takeover battle because it would have needed to undertake a significant rights issue to raise the cash to acquire Al Noor.
Already this year NMC Health has bought four healthcare businesses: the Abu Dhabi home care service provider Americare Group; Dr Sunny Healthcare Group; a chain of six medical centres; and three pharmacies in Sharjah; ProVita International Medical Center, which has facilities in Abu Dhabi and Al Ain; and a majority stake in Barcelona’s Clinica Eugin.
lbarnard@thenational.ae
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