UAE hospital operator NMC Health pursues Gulf expansion

United Arab Emirates-based hospital operator NMC Health plans to expand in Gulf markets with a debut bond issue to fund acquisitions, its new chief executive said on Monday.

NMC is among the beneficiaries from substantial growth in the Gulf’s healthcare sector as an increasingly wealthy population becomes more susceptible to lifestyle diseases such as diabetes and obesity.

The company’s main focus since its London listing in 2012 has been its UAE home market, where it has both built and acquired hospitals, including last month’s completion of the purchase of Al Zahra Hospital in Sharjah for $560m.

However, NMC is among the first healthcare providers to expand across Gulf markets, competing with the likes of John Hopkins in Saudi Arabia and largely local hospitals elsewhere.

“We want to continue to expand in the region – organic as well as through acquisitions,” Prasanth Manghat told Reuters.

“For acquisitions, we need funds; both loans and a bond. The bond will be attached to an acquisition.”

The size of the bond and arrangers have yet to be finalised.

Manghat was appointed chief executive of NMC this month after it reported more than 61 per cent profit growth for 2016 on revenue up by nearly 39 per cent.

NMC has about $200m in cash and around $100m in unused financing facilities, he said.

Among the company’s target markets is Saudi Arabia, Manghat said, having made a first foray into the kingdom in August by building a new hospital as well as acquiring a stake in another.

“There’s a big demand-supply gap and the government is not a big investor. We are looking at expanding widely there through organic and inorganic ways,” he said.

NMC will open a fertility clinic, the first in Qatar, in the second quarter of 2017 and plans to close the acquisition of two hospitals of privately-owned Atlas Group in Oman very soon, Manghat added.