Healthcare deals, particularly for hospitals, are heating up in the United Arab Emirates. On December 14, NMC Health, the country’s largest private healthcare company, announced its acquisition of Al Zahra Hospital in Sharja.
Al Zahra is one of the largest private hospitals in the UAE, operating 137 active inpatient beds. It serves approximately 400,000 outpatients and 23,000 inpatient bed days per year. Its owner, Gulf Medical Projects Company, agreed to a purchase price of Dhiram2.1 billion, or approximately $571.7 million. That works out to nearly $4.2 million per bed, but if the claim that the hospital had $130 million in revenue in 2015, the revenue multiple of 4.4x doesn’t seem exorbitant.
NMC’s acquisition of Al Zahra Hospital follows the $2.3 billion merger of its UAE-based competitor, Al Noor Hospitals Group plc (LSE: AHN), with South Africa’s Mediclinic International (OTCQB: MCFFY), announced in October 2015. That deal created the third largest international healthcare group outside of the United States.
NMC has identified approximately $6.5 million of annual cost synergy benefits expected to be derived from the acquisition from the second year post-completion onwards. This transaction is expected to close in the first quarter of 2017.