NMC Health Plc Acquisitions of outstanding minority interests (9443A)
January 04 2018 - 1:00AM
UK Regulatory
TIDMNMC
RNS Number : 9443A
NMC Health Plc
04 January 2018
4 January 2018
NMC Health plc
(the "Company" or "NMC")
Continued progress against group strategy
- Acquisition of minority stakes in Fakih IVF and As Salama Hospital
- Enterprise Values of both Fakih IVF and As Salama Hospital
approximately the same as at the time of original acquisitions,
despite substantial growth in underlying profitability
- Formal closing of Al Qadhi and Al Rashid Hospital transactions in KSA
NMC Health plc (LSE: NMC), the leading integrated healthcare
provider operating across the United Arab Emirates, is pleased to
announce that it has acquired the outstanding minority stakes in
Fakih IVF and As Salama Hospital for a total consideration of c.
USD 218mn, implying 2017 P/E multiple of just under 10x for the two
assets combined. The Company also announces the completion of the
previously announced Al Qadhi and Al Rashid Hospital transactions
in the Kingdom of Saudi Arabia (KSA).
Acquisition of minority stakes in Fakih IVF and As Salama
Hospital
NMC has acquired the outstanding 49% minority stake in Fakih IVF
at approximately the same Enterprise Value as the original
acquisition cost set in 2015. The acquisition is being settled in
the form of cash and newly issued shares in NMC Health with a total
consideration of USD 205mn (27% cash, 73% NMC shares issued, which
represents c.3.5 million shares or 1.8% of NMC's current issued
capital based on NMC's current share price of GBP29.20 ($39.42 at a
GBPUSD exchange rate of 1.35 for 3 January 2018)). In addition, Dr.
Michael Fakih will retain his role as a Medical Director in NMC and
continue his practice as a medical doctor.
With Fakih IVF now a wholly owned subsidiary of NMC, the Company
is better positioned to accelerate and expand growth globally
within its fertility business. NMC will continue to expand its
fertility network, from the new IVF clinics opened in UAE and Oman
in 2017 and additional expansions planned in other geographies,
particularly KSA, to maintain a market leading position.
As owner of the remaining 49% stake in Fakih IVF being acquired,
and as a director of Fakih IVF, which is a subsidiary undertaking
of NMC, Dr. Fakih is therefore deemed to be a related party to NMC
for the purposes of Listing Rule 11. The transaction amounts to a
smaller related party transaction as defined in Listing Rule
11.1.10.
The outstanding 30% minority stake in As Salama Hospital was
acquired at the same Enterprise Value of USD 45mn which was set in
2016 with the initial 70% stake. The acquisition is being fully
settled in cash.
These two acquisitions were financed from the issuance of shares
to Dr. Fakih and existing cash resources from our strong and stable
balance sheet which remains within our leverage guidance. In
aggregate Fakih IVF and As Salama Hospital would have contributed
c. USD 22mn to NMC's FY17 net income on a pro forma basis. The
acquisitions became effective on 1 January 2018.
Closing of Al Qadhi and Al Rashid Hospital purchases in KSA
As announced on 25 September 2017, NMC acquired a 60% stake in
Al Qadhi Hospital in Najran and a 100% stake in Al Rashid Hospital
in Ha'il for an aggregate consideration of USD 40m. All formalities
related to both transactions have now been completed and the
contributions from both hospitals will be consolidated in NMC's
results from the beginning of 2018. These facilities represent an
important step ahead in NMC's drive to establish a well-developed
footprint in KSA.
Prasanth Manghat, Chief Executive Officer, commented:
"In December 2017, I set out our strategy to drive the Company's
next phase of growth. The transactions today fit with our
commitment to increase our capacity, capabilities and geographic
coverage. The acquisition of the outstanding minority stakes in
Fakih IVF and As Salama Hospital represent highly value accretive
transactions for NMC's shareholders. In particular, the Fakih IVF
transaction provides us with an enhanced platform from which to
grow our fertility business. As the second largest global IVF
player, NMC remains very well positioned to be the leading
consolidator in the fertility market. We will continue to seek
opportunities to consolidate minority stakes in our subsidiaries,
as we increase our knowledge and understanding of these businesses,
where we can create further value for shareholders."
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 / Victoria Foster Mitchell
+44 (0)20 3727 1000
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.
This information is provided by RNS
The company news service from the London Stock Exchange
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