Healthy, Wealthy And Wise

Opportunities for wealth creation in Middle East North Africa (MENA) region can be found in demand for the services sector, in particular healthcare and education. Successful privately owned companies are finding themselves the target of private equity and larger strategic companies who are seeking opportunities in existing firms in the region to develop or integrate them into a larger healthcare or education platform.

Investors are looking for M&A opportunities in regional privately owned healthcare companies. This could be in hospitals, pharmaceutical plants, medical devices and medical products, imaging diagnostics, laboratories, logistics companies, distribution and medical waste management. In education, opportunities are being sought in existing schools with a number of investors interested in targets from kindergarten to 12th grade.

wealthmonitor is increasingly reporting on companies for sale and companies looking to acquire in these sectors. In the last six months it has reported on SABA Medical, the Saudi Arabian group of six full service polyclinics, being acquired 25 per cent by the Saudi Arabian healthcare and life sciences investment firm Reaya Holding. Reaya’s chief executive Ahmed Emara said the plan is to expand the brand throughout the Kingdom by organic growth and M&A.

In education, a company source at family-owned Ibn Kaldoun Educational Company in Riyadh told wealthmonitor it could be interested to talk with potential partners and investors. With total students now at 4,500, Ibn Kaldoun would also like to open two other branches to add to capacity, the source said.

Both sectors are being driven by demand and supply. You have challenges in countries like Saudi Arabia, for example, where the majority of the population of 28 million is said to be under the age of 21. A vast swathe of money is being wrapped around the education sector in the country with major new educational establishments being built. Saudi private equity firm Amwal Al Khaleej has education on its radar and its chief executive Ammar Al Khudairy has told wealthmonitor it is seeking acquisitions to develop its Rowad Schools portfolio. Amwal AlKhaleej Partnership II fund invested into Saudi’s Rowad Schools chain in 2008, taking a 52.5 per cent stake.

Heavy investment is currently going into the healthcare sector across the region as it faces rising demand for healthcare products and services. Growing populations and nutritional and lifestyle habits has increased problems with lifestyle related diseases and conditions including diabetes, obesity and heart disease. Specialist niche areas in medicine such as renal care, oncology, rehabilitation and mental health are also required in the region. Mark Adams, chief executive of UAE’s Gulf Healthcare International told wealthmonitor that it would make acquisitions to develop its company brands in the Gulf region. GHI has already acquired Dr. Joseph’s Clinics, three UAE primary healthcare medical practices.

wealthmonitor is a journalist-based intelligence service that reports on current and potential M&A activity.