Saudi Arabia’s Fakeeh Care Group to sell 21.47% stake in Riyadh IPO

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Saudi Arabia’s Fakeeh Care Group, one of the kingdom’s biggest healthcare providers, said on Wednesday that it plans to sell a 21.47 per cent stake through an initial public offering (IPO) on the Saudi Exchange (Tadawul), as listings in the GCC region pick up after a short hiatus.

The healthcare group, which operates hospitals in Jeddah and Riyadh, plans to offer 30 million new shares and 19.8 million existing shares to investors – equivalent to 21.47 per cent of the company’s paid-up capital.

Fakeeh Care Group has hired HSBC Holdings as a sole financial adviser joint bookrunner and lead manager while anb capital and EFG Hermes. Moelis & Co. are advising the selling shareholders.

The family-owned business said the offering price will be determined at the end of a book-building process. It is offering the shares in two tranches — institutional investors and retail investors— between May 2 and May 22.

Fakeeh Care Group plans to use the proceeds from the sale of new shares to finance its growth strategy.

Founded in 1978, Fakeeh Care Group has 900 doctors, 835 beds, 374 examination rooms and 40 operating theatres across four hospitals and five medical centres. The healthcare group plans to expand to seven hospitals with 1,675 beds and nine medical centres by 2028.

Fakeeh Care Group’s revenues reached $613m (SAR2.3bn) in 2023, up from SAR1.7bn in 2020 while its profit in 2023 came in at SAR232m.

Saudi Arabia’s IPO boom

Meanwhile, Saudi Arabia’s Fakeeh Care Group joins water treatment firm Miahona Company in announcing its IPO plans nearly a month after flour milling company Modern Mills Company debuted on Tadawul in a $314m share sale.

Vision Invest, the holding entity behind water treatment firm Miahona, plans to sell 48.3 million shares, equivalent to 30 per cent of the company’s paid-up capital.

Miahona hired Saudi Fransi Capital as lead manager for the offering and joint financial adviser together with EFG Hermes, according to a statement on Wednesday. Book building for institutional investors will run from April 29 to May 2 while retail buyers will be able to bid from May 21 to May 22.

GCC countries have been encouraging more family-owned and private companies to list in a bid to deepen capital markets as part of reforms aimed at reducing the region’s reliance on oil revenue.

The oil-rich region is set to see more equity capital markets activity in 2024 as more companies are considering public listings amid a global slowdown

IPOs by private companies have been on the increase this year with Saudi Arabian milling company Modern Mills and healthcare firm Avalon Pharma coming to the market and supermarket chain franchisee Spinneys expected to list in Dubai next month.

Read: Here’s why the GCC IPO bonanza is here to stay