NMC to acquire Al Zahra Hospital for Dh2.06b

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NMC to acquire Al Zahra Hospital for Dh2.06b
CEO Dr B.R. Shetty hopes NMC's acquisition of Al Zahra Hospital will boost its position in Sharjah.

Dubai - Combined entity would post 21% jump in net profit to $290m this year

by

Issac John

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Published: Wed 14 Dec 2016, 5:50 PM

Last updated: Sun 18 Dec 2016, 10:57 AM

NMC Health said on Wednesday that it would acquire Sharjah's Al Zahra Hospital for Dh2.06 billion, marking a new milestone in its growth story.
The deal, one of the major buyouts in the UAE's healthcare history, has been finalised and the takeover of Al Zahra Hospital from Gulf Medical Projects Company will be effective in the first quarter of 2017.
NMC hopes the strategic acquisition will better position it to bolster its operations in Sharjah where it made a foray in 2015 through the acquisition of Dr Sunny Healthcare Group, B.R. Shetty, chief executive officer of NMC, told Khaleej Times.
In 2015, NMC Health bought two new health groups, also including the Abu Dhabi-based home care service provider Americare Group, for a total of almost $100 million.
Shetty said NMC's expansion into the Sharjah healthcare market represents another major advance towards its objective of developing a leading integrated private healthcare operator in the UAE. "We remain committed to further develop the local healthcare market by offering best in class services and facilities to our patients," he said. "The acquisition of Al Zahra Hospital is fully in line with our strategy and demonstrates our focus on delivering long-term growth of our strategic and competitive capabilities to expand sustainable shareholder returns."
Prasanth Manghat, deputy chief executive officer of NMC, said based on projections for 2016, the combined entity would have posted a 21 per cent jump in net profit to $290 million this year, including NMC's estimated $240 million net profit.
"The acquisition of Al Zahra Hospital, one of the leading and most reputable hospitals in the UAE, carries tremendous strategic significance for NMC and expands the Group's reach within the region," said Manghat.
The acquisition, subject to shareholder approval, is a strategic step forward for NMC Health and will reinforce the company's position as a leading provider of healthcare services in the UAE private sector.
Al Zahra Hospital will complement the group's existing network of seven out-patient medical centres in Sharjah, said Manghat.
Al Zahra Hospital is one of the largest private hospitals in the UAE, operating 137 active inpatient beds, serving approximately 400,000 outpatients and 23,000 inpatient bed days per year. It provides services of an international standard, supported by state-of-the-art facilities including cutting edge radiology and laboratory practices, as well as seven operating theatres, recovery room beds, more than 80 individual clinics, a maternity complex and emergency room beds, including triage.
The Al Zahra Hospital has demonstrated a strong track record of growth and for the year ended December 2015 achieved revenues of $130.4 million, and net profit of $38.8 million respectively. NMC has identified approximately Dh23.7 million of annual cost synergy benefits expected to be derived from the acquisition from the second year post completion onwards.
In view of its size, the acquisition requires the approval of the company's shareholders at a General Meeting, which is taking place in London on December 29th. As part of the financing of the acquisition, the company is undertaking a placing of up to 9.99 per cent of the issued share capital of the company, as separately announced, and has also put in place new debt facilities.
Prospects of the UAE healthcare sector look bright given its growth potential with only 1.3 hospital beds per one thousand capita compared to the world average of 2.9 and the European average of 6.4. This is despite the UAE demonstrating high population growth of 4.2 per cent from 2008 to 2015 compared to the world average of 1.2 per cent and a flat European population.
- issacjohn@khaleejtimes.com


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