As an entrepreneur, you’re essentially an opportunist who, through creativity and ambition, is able to create value — social or economic,” says Dania Alsammarae, the co-founder of Anglo Arabian Healthcare. The UAE-based company owns and operates 16 assets, employs over 300 people — including 60 doctors — and serves over 400,000 registered outpatients, with average daily visits of over 1,500 patients.
“Nothing compares to the challenges that you will face in setting up your own business. When you are in a big corporate, you’re sheltered. You’re working within someone else’s defined goalposts, but when you step out on your own, you’re exposed; it’s all on your shoulders,” says Alsammarae.
“It’s challenging but all of that hard work, effort and ambition is because at the end of the day we believe in what we’re doing and we believe as we progress we will be improving healthcare.”
Alsammarae was one of four co-founders behind Anglo Arabian Healthcare (AAH), all of whom identified an opening in the healthcare industry in the UAE. The concept was initially thought up by CEO Mark Adams, previously CEO at Gulf Healthcare International (GHI), who felt the market was crying out for an integrated healthcare network.
“The idea was to establish a portfolio of brands, acquire majority stakes into a number of operating assets, establish some greenfield assets and organise it all into a feeder hub and spoke network.
“He approached me and asked my thoughts on the idea and if I was willing to take the leap and join AAH to develop it further.
“At the time I was working in a stable and lucrative position with Pfizer but I had always planned to do something entrepreneurial. So when the opportunity presented itself, I felt the risk was worth it.
”It meant I could embark on effecting change in healthcare delivery in a much larger platform, which had been my goal even as a practising physician.”
Adams and Alsammarae were joined in the self-funded venture by marketing director Julie Adams and chief operating officer (COO) Kieran Watts.
“It was us sitting around the table saying ‘which assets will develop our goal, how can we secure the platform, what’s best for keeping momentum’.
“We created everything from administrative processes and procedures to the manner of acquisition and negotiation, to fit with our value and mission statement.
“After developing the entire platform in a way that we felt best served the population in terms of healthcare, we approached a number of potential investors.”
Initial work on AAH started in January 2012, and with the development of the investment memorandum, which was completed in May 2012.
“By June, we were already talking to a number of investors, and from September we were in serious discussions with Waha Capital. From there, they had to vet the entire business and do due diligence on the assets that we had brought through. By June 2013 we were in business and officially launched,” she says.
Waha Capital, whose shareholders include Abu Dhabi government entities, bought 97 percent of the business for an undisclosed sum, with the remaining percentage divided amongst the co-founders. “We found a great fit with Waha Capital. They had always wanted to enter into the healthcare sector in a holistic sense, including prevention and education,” Alsammarae says.
“So, when they met us, they looked into our philosophy and plan, vetted it from top to bottom and said ‘yes, this makes a lot of sense’. For us, it was the same thing. We weren’t just looking for funding but wanted a strategic partner — someone who wanted to keep growing the business.”
AAH has built up a considerable portfolio, with a strong presence in the UAE’s northern emirates. Its assets include a day-surgery hospital in Sharjah and a new 120-bed hospital in Ajman, which is due to open early next year, as well as six clinics, five pharmacies and three laboratories across Abu Dhabi, Sharjah, and Ajman.
The group plans to expand rapidly in the next few years, both organically and through further acquisitions.
“Waha has publicly stated that they’re looking at another AED200m to AED250m investment and for us that is key. The entire UAE is on our radar and we are focusing continued growth of the platform across the country,” says Alsammarae.
AAH operates its various assets under different brands, targeting different markets. Amina Hospitals and Clinics are high-quality, accredited specialised healthcare facilities based in Sharjah and Ajman, with further launches planned for Sharjah, Dubai and Abu Dhabi during 2014. Proficiency Healthcare Diagnostics (PHD) is an established network of accredited laboratories and radiology centres across the UAE offering diagnostic solutions, with plans to expand into Dubai in 2014.
The ‘Mandala Clinics — Health Matters’ provide affordable, accessible and reliable primary healthcare for everyone. Currently based in Sharjah and Ajman, further expansions are planned for Ras Al Khaimah, Dubai and Abu Dhabi during 2014. The MyFarm Pharmacy Group supports AAH’s clinics and hospitals by providing strategically positioned pharmacies.
More generally, the healthcare industry in the UAE could not be in better health right now. It’s an industry that has been attracting the interest and support of investors — the ultimate sign of confidence.
Ithmar Capital took Al Noor Hospitals Group through an initial public offering (IPO) on the London Stock Exchange in June last year, and raised $342m, selling 38.5 million new and existing shares (32.9 percent of its equity).
“The trust today in the healthcare sector has gone up significantly,” Faisal Bin Juma Belhoul, founder and managing partner of Ithmar Capital and vice chairman of Belhoul Group UAE, said after the IPO.
Behind the investors’ confidence is a growing demand for healthcare services in the UAE, on the back of high population growth rates, the continued growth of regional medical tourism and the introduction of compulsory health insurance.
A recent Colliers International report on the healthcare industry estimated that high quality and efficient private hospitals could achieve 15 percent to 20 percent net profit margins.
In all, the value of the UAE’s healthcare market is forecast to reach AED3.5bn to AED4bn by 2018.
But it’s the introduction of mandatory health insurance that Alsammarae says has really changed the healthcare industry in the UAE.
“That is an absolute game-changer for us. When we first began introducing our platform in the market, people would ask ‘why would you focus there [the northern Emirates]? There’s so much money to be made in other areas’. But we’ve been in the market for a number of years and knew that it was a matter of a year or two for mandatory insurance to roll out,” says Alsammarae.
“We decided to start there and partner with some fantastic assets with real growth potential and ride the wave as mandatory health insurance rolls out. We’ve already felt the positive effects of this strategy and expect the success to continue.
“Outside of the Northern Emirates, we have a key lab business in Abu Dhabi — which operates as our main referral lab and we plan to continue upon its resounding accomplishments.”
In Abu Dhabi, the company saw a tenfold increase in outpatient claims and a fourfold increase in inpatient claims within a short period.
“We felt a similar effect would occur in Dubai and the Northern Emirates and knew that if we waited for mandatory insurance to be implemented, it would cause an increase in valuations and we’d miss out on the ‘hockey stick’ growth,” she says.
“Instead, we knew that it was coming and decided it was the right time to enter the market with our platform and acquire these assets.
“None of the assets which we’ve acquired is a distressed or turnaround asset; all our facilities were in an early stage of growth with fantastic potential which they could realise with the right partners. There’s no asset that we’re looking at acquiring a majority stake in, just to see the key physician walk away. It’s about joining hands with us and continuing the growth together.”
AAH has a number of greenfield projects, but in keeping with their fast approach, they look for ready-built buildings that can be converted. And beyond the UAE, Alsammarae says they are considering other countries in the GCC, but not just yet.
“That’s something that we’re working on right now. Oman, Qatar, Saudi Arabia — these are also key markets for us. We decided that for the first year or two, we wanted to focus on our core UAE platform, develop all our IP here and then expand into other GCC countries. It’s a bit easier when you’ve learned most of the lessons on your home turf,” says Alsammarae.
Born and raised in Chicago, the Middle East is very much home for Alsammarae, whose parents are from Baghdad. Her own background is in medicine, having studied and trained as a physician in the US and Ireland.
“At the same time, I had the opportunity to work in different hospitals in the Middle East — Jordan, Egypt and Lebanon as it was always my goal to come back to work in the region.
“When I worked here, I felt I was amongst fantastic physicians, but there was a disconnect with the system and because of that the quality of care was compromised. I loved clinical medicine, but felt I could put my background, experience and education to use in improving the administrative and business applications of healthcare from a physician’s point of view,” she says.
“I had the opportunity to come to Dubai and work with Booz & Co in their healthcare consulting practice. Coupling my education and experience as a physician with my work as a consultant, first at Booz & Co. and then at Pfizer, allowed me to have a holistic view of healthcare from the clinical provision to the strategic, business planning and financial, onwards to medications and manufacturing.”
One day, she hopes to establish a healthcare facility in Iraq, where she sees a lot of potential.
“Especially in Northern Iraq where it’s quite stable. Emaar is there and Rotana is there — there are so many different companies there that have established huge bricks-and-mortar operations.”
Dania Alsammarae on...
Plans to list
“As a management team we are solely focused on growing this business. Likewise, Waha Capital have stated that they are looking at growing Anglo Arabian Healthcare for another three to five years. Exit options are down the road; right now it’s about focussing on developing this business. Exit options will be mostly about opportunity and timing.”
Gaps in the portfolio
“For the most part, when it comes to developing a hub-and-spoke clinical hospital network, there are times where we don’t find the right acquisition to
plug in. It makes sense to develop a greenfield unit to address that gap in
the way that we feel makes the most sense to business. “
The healthcare sector in the UAE and the rest of the Gulf
“In the UAE there have been a lot of moves towards maturing the market thanks to regulatory focus. Things like mandatory insurance and increased licensing standards are really ensuring that there’s access to safe healthcare, which you don’t find in every part of the Middle East.
“I think that there are large numbers of private providers, but to me it seems like a lot of people are offering similar services to their competitors.
“In places like Oman and Qatar, there’s not much strong competition and the market is demanding higher quality care. These markets are interesting for a high growth business like ours, and we’re reviewing market entry potentials.
“When it comes to Saudi, there’s some pretty significant competition and it is more mature. They started mandatory insurance before the UAE, though their rollout has been more phased.
“The sheer volume of patients in Saudi Arabia and the high population growth rates, coupled with higher rates of obesity and diabetes means that there will be constant demand for healthcare provision. But with Saudi you need to ensure your market entry strategy is done correctly.”
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