Wednesday 18 July 2018

Prasanth Manghat

NMC Health plans major expansion in Saudi Arabia

DUBAI, September 25, 2017

NMC Health, a leading integrated healthcare provider operating across the UAE, has announced that it has received all regulatory approvals for its long-term care facility, Chronic Care Specialty Medical Center (CCSMC), in Jeddah, Saudi Arabia.

CCSMC is believed to be one of the first greenfield medical facilities in Saudi Arabia to be established by a non-Saudi Arabia 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.”

In line with the growth strategy set in 2016, NMC Health has adopted a three-pronged strategy to pursue its expansion plans in Saudi Arabia, through both organic and inorganic growth. The plan includes:

1.    Offering specialised 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;  and

3.    Pro-active participation in the privatization process planned by the Saudi Arabian government, including any Operation & Management opportunities that become available.

Chronic Care Specialty Medical Center

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 September 26.  A phased ramp up is planned and the hospital is projected to be at full capacity by H1 2019.

NMC’s expansion within Saudi Arabia
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 $40 million. 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 per cent stake in a new hospital in the southern Saudi 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 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 Saudi Arabia 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, the company said. – TradeArabia News Service 

Tags: Saudi Arabia | NMC Health |

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