Proposed joint venture will create one of the largest private healthcare platforms operating in the Gulf kingdom
UAE-based NMC Health has announced the signing of a non-binding agreement to form a joint venture healthcare platform with Hassana Investment Company, an arm of the General Organisation for Social Insurance (GOSI), which is the largest pension fund in Saudi Arabia.
The proposed JV - formed through contribution of existing assets by both NMC and GOSI’s investment in Tadawul-listed National Medical Care Company (CARE) - would create one of the largest private healthcare platforms operating in the Gulf kingdom, a statement said.
It added that the JV would have a strong foothold in Riyadh, the single largest healthcare market in the country, as well as in multiple smaller, underserved cities.
The enlarged organisation is expected to benefit from economies of scale, allowing more efficient deployment of capital, increasing patient choice and optimizing returns across multiple assets.
Under the deal, NMC will contribute all of its existing Saudi-based assets as part of the formation of the JV platform which will have a combined bed capacity of 1,489 - 664 beds contributed by NMC and 825 by CARE.
Formation of the JV is subject to regulatory approvals and signing of definitive agreements after completion of necessary due diligence by both the parties, the statement said, adding that NMC will retain a majority stake, as well as operational control, in the JV.
Prasanth Manghat, CEO of NMC, said: “We identified Saudi Arabia as a key strategic priority for NMC and the proposed partnership between NMC and GOSI/Hassana would offer a tremendous opportunity for both the companies to better serve the Saudi healthcare market.
"The Saudi government’s forward looking and investor friendly policies make the kingdom one of the most attractive destinations in the region for investment in the healthcare sector."
He said the proposed JV platform will continue to fill service gaps in the market.
Saad bin Abdulmohsen Al-Fadly, CEO of Hassana, added: “The proposed partnership between Hassana and NMC is driven by our view that healthcare in Saudi Arabia is one of the most attractive markets for strong long-term growth.
"The proposed JV has ambitious growth plans across different healthcare sub-sectors, with both partners committed to compounding returns over the long-term, whilst providing best-of-class services to patients.”