25 Sep 2017 08:00
25 September 2017
NMC Health plc
(the "Company" or "NMC")
Significant expansion into Kingdom of Saudi Arabia (KSA)
NMC receives all regulatory approvals for long-term care facility in Jeddah
Agrees terms to acquire two new profitable hospitals
Plans for a new 170 bed greenfield facility
NMC Health plc (LSE:NMC), the leading integrated healthcare provider operating across the United Arab Emirates, is pleased to announce that it has received all regulatory approvals for its long-term care facility, Chronic Care Specialty Medical Center (CCSMC), in Jeddah, KSA. CCSMC is believed to be one of the first greenfield medical facilities in Saudi Arabia to be established by a non-KSA company.
Prasanth Manghat, CEO of NMC Health stated, "NMC would like to thank the Saudi government for the support it has offered us during the regulatory approval process. As one of the first foreign entrants into the KSA healthcare sector, we have learned a great deal over the past year and intend to use this knowledge to better navigate the Saudi regulatory landscape moving forward. With a total licensed capacity now at about 700 beds, we see the Kingdom as an important part of NMC's growth strategy and will continue to identify areas in which we can fill gaps in the country's healthcare offerings."
NMC is delivering against its well-defined strategy for expanding into KSA
In line with the growth strategy set in 2016, NMC Health has adopted a three-pronged strategy to pursue its expansion plans in KSA through both organic and inorganic growth:
1. Offering specialized services such as long-term care, home health and fertility in larger tier-1 cities where competition remains high in the multi-specialty segment.
2. Targeting assets under any of NMC's verticals in tier-2 cities which lack adequate medical services and continue to receive lesser investment than the larger cities.
3. Pro-active participation in the privatization process planned by the KSA government, including any Operation & Management opportunities that become available.
Chronic Care Specialty Medical Center Approval and Ramp-up
As the first greenfield healthcare facility in Saudi Arabia established by a foreign company, Chronic Care Specialty Medical Center represents a landmark event for the KSA healthcare market and for NMC Health in particular.
The 220-bed long-term care facility initiated operations with 50 beds . All beds are fully committed to patients currently residing in short-term acute care hospitals in Jeddah and the surrounding areas and the migration of patients will begin on 26 September. A phased ramp up is planned and the hospital is projected to be at full capacity by H1 2019.
NMC's new organic and inorganic expansion within KSA
NMC Health has reached agreements to acquire a multi-specialty hospital in each of the northwestern and southern regions of Saudi Arabia for an aggregate consideration of USD $40m. In addition, NMC intends to establish a greenfield multi-specialty facility in Al Khobar after the encouraging operational success of the recently acquired As Salama Hospital.
1. Multi-specialty hospital in Najran
NMC agreed to acquire a 60% stake in a new hospital in the southern KSA city of Najran. The hospital initiated outpatient operations in late 2016 and commenced inpatient services in Q1 2017. The facility boasts state of the art clinical equipment and is well positioned to provide tertiary care services to this area of Saudi Arabia. The acquisition is expected to close later this year. The hospital houses 100 beds with adjacent land for future growth.
2. Multi-specialty hospital in Ha'il
NMC has agreed to fully acquire a hospital in the northwestern KSA city of Ha'il. The hospital began outpatient operations in 1991 and is a pioneer in private healthcare in the NW region. The hospital holds 60 beds, but plans are under way to utilize existing land to increase capacity to greater than 100 beds. The hospital currently provides multi-specialty services to Ha'il and the surrounding area. The acquisition is expected to close later this year.
3. 170 bed multi-specialty hospital in Al Khobar
A shell and core, greenfield project is planned in the Western Province of KSA with a projected capacity of 170 acute care beds. The facility is expected to be operational in H1 2019.
Chronic Care Specialty Medical Center, along with the acquisition of two existing facilities (both of which are profitable) and the planned greenfield project, are expected to positively impact NMC's EBITDA from 2018 onwards. Both acquisitions, as well as the greenfield project in Khobar, will be funded through a combination of cash on the balance sheet and utilization of available debt facilities.
Enquiries:
NMC Health plc
Prasanth Manghat, Chief Executive Officer
+971 (0)50 522 5648
Prashanth Shenoy, Chief Financial Officer
+971 (0)56 3290545
Asjad Yahya, Investor Relations
+971 (0)56 2190975
Media:
FTI Consulting, London
Brett Pollard / Mo Noonan
+44 (0)20 3727 1100
FTI Consulting, Gulf
Shane Dolan
+971 (0)4 437 2100
About NMC Health
The NMC group (the "Group") is the leading private sector healthcare operator in the United Arab Emirates, with a nation-wide network of hospitals and operations in the country since 1975. The Group currently operates or manages over 40 assets across 11 countries. NMC is also ranked as one of the top 3 in-vitro fertilisation ("IVF") operators globally. The Group is also a leading provider of long-term medical care in the UAE through its subsidiary ProVita. Pursing an aggressive international expansion program from 2016, the company now has over 35% of its licensed bed capacity in the Kingdom of Saudi Arabia (KSA), where the company has introduced long-term and multi-specialty care services. The enlarged company received almost 4.3 million patients in 2016. The Group is also a leading UAE supplier of products and consumables across several key market segments, with the major contribution coming from healthcare related products. The Group reported revenues of US$1.2 billion for the year ended 31 December 2016.
In April 2012 NMC was listed on the Premium Segment of the London Stock Exchange. NMC is a constituent of the FTSE 100 Index.