UAE-based healthcare firm NMC has announced a non-binding joint venture deal with Saudi government agency the General Organisation for Social Insurance’s (GOSI) investment arm.
The kingdom’s healthcare sector is considered one of the most promising areas for foreign investment under a government plan to privatise state assets.
The proposed joint venture will see NMC partner with Hassana Investment Company to create one of the largest private healthcare firms in Saudi Arabia.
NMC said it would contribute its existing Saudi-based assets and GOSI, which is the kindom’s largest pension fund, would provide its 38.9 per cent stake in the Tadawul-listed National Medical Care Company.
Each side will contribute 664 and 825 hospital beds respectively for a combined capacity of 1,489, with synergies expected to come in revenue cycle management, procurement, HR and IT systems across facilities.
NMC will hold the majority of the proposed venture with the exact stake yet to be decided. It will also retain operational and management control of the assets held by the joint venture.
The company said once the venture was operational itwould focus taking majority and minority stakes in Saudi healthcare firms and pursuing operational and management contracts for government and private hospitals in the country.
“The Saudi government’s forward looking and investor friendly policies make the kingdom one of the most attractive destinations in the region for investment in the healthcare sector,” said NMC CEO Prasanth Manghat.
“NMC has been the most progressive foreign entrant in the Saudi healthcare market, and the proposed partnership with Hassana would accelerate the process of bringing international best practices to KSA.”
NMC Health reported a 38.2 per cent rise in annual net profit for 2017 and said it would pursue new acquisitions.
The company, which was included in the FTSE 100 index last year, manages more than 125 assets in 13 countries.