Saudi Arabia’s Fakeeh Care Group sets IPO price range, seeks to raise $763m

Saudi Arabia’s Fakeeh Care Group has started taking investor orders for its initial public offering (IPO), as one of the largest private hospital groups in the kingdom seeks to raise as much as $763m (SAR2.9bn) amid strong demand for regional listings.

Fakeeh is offering 49.8 million shares, equivalent to 21.47 per cent of the healthcare provider’s total issued share capital.

The indicative share price of SAR53 and SAR57.5 per share implies a market valuation of around $3.6bn (SAR13.3bn).

The hospital group’s IPO drew in two cornerstone investors – Olayan Saudi Investment Company and Abu Dhabi Investment Authority (ADIA) – that will subscribe for a total of SAR173m.

ADIA committed to buying 1.04 million shares in the deal, Fakeeh said in a statement, while Olayan will buy 1.95 million shares.

Fakeeh is offering the shares in two tranches – institutional investors and retail investors – between May 8 and May 21, with the final offer price expected to be announced on May 14.

Founded in 1978, the group has 835 beds across four hospitals and five medical centres. Its revenues reached SAR2.3bn in 2023, up from SAR1.7bn in 2020 while its profit was SAR232m in 2023.

The family-owned business plans to expand to seven hospitals with 1,675 beds and nine medical centres by 2028.

The company plans to use the proceeds from the share sale to finance its growth strategy.

Fakeeh Care Group has hired HSBC Holdings as the sole financial adviser and joint bookrunner together with anb capital and EFG Hermes. Moelis & Company Saudi is advising the selling shareholders.

Fakeeh joins Saudi Arabia’s IPO frenzy

Meanwhile, the GCC is set to see more equity capital markets activity in 2024 as more companies seek public listings, having been a bright spot amid a slowdown elsewhere last year.

Fakeeh is among three Saudi companies that recently announced their intentions to go public. Saudi Arabia has been encouraging more family-owned companies to list in a bid to deepen its capital markets as part of reforms aimed at reducing the country’s reliance on oil revenue.

Last week, water treatment firm Miahona closed institutional order books for its IPO of as much as SAR555.2m on Thursday while Saudi Manpower Solutions Company announced its listing plans earlier this week.

Similarly, Spinneys’ franchisee in the UAE and Oman (Spinneys 1961 Holding) attracted $19bn in investor orders for its $375m (Dhs1.38bn) IPO on the Dubai Financial Markets.

The supermarket chain is offering 900 million shares, equivalent to 25 per cent of its total issued share capital.

Read: Supermarket chain Spinneys’ $375m IPO draws orders worth $19bn