Abu Dhabi: Gulf Capital, one of the largest private equity firms in the Middle East, announced that it has acquired a 75 per cent interest in TechnoScan, the largest chain of medical diagnostic imaging centres in the Middle East.
TechnoScan, founded in 1995 in Egypt, operates 15 imaging centres, 13 of which are wholly owned and two of which are owned in partnership with other investors. The TechnoScan centres were founded by Dr Ossama Khalil, a well known and respected Egyptian physician. Dr Khalil remains as a co-owner of the company and member of the board of directors.
With a population of around 79 million, Egypt is the second-largest health care market after Saudi Arabia. Health care spending in Egypt increased by 22 per cent in 2009, according to the EIU estimates, to $13.3 billion (Dh48.8 billion) and is expected to continue on this trajectory as a result of the ageing population, increasing health awareness, increased income and, most importantly, increased incidence of lifestyle diseases.
Imaging, which constitutes between 10 per cent and 15 per cent of private health-care spending, is expected to grow substantially as well.
Demand growth will require substantial investment by the private sector, and TechnoScan as the largest private chain will be a primary beneficiary of this opportunity. For example, the number of MRI scans in Egypt is 7,000 per million (compared to 64,000 in developed countries), and is expected to grow by 15 per cent to 20 per cent in the next two years.
TechnoScan will gain substantially from the strategic alliance between GE Healthcare and Gulf Capital announced last month. GE Healthcare will be offering strategic support to TechnoScan, and will collaborate closely in the roll out and new services.
Commenting on the successful investment, Dr Karim Al Solh, Chief Executive Officer of Gulf Capital, said: "We are pleased to have acquired a majority interest in TechnoScan, the clear leader in the medical diagnostic and imaging industry in the region. Health care represents a rapidly growing sector, not only in Egypt, but throughout the Mena region. This investment follows our stated strategy of investing in defensive yet high growth sectors that benefit from the regional population growth, increased government spending and increased private sector participation.
Aggressive expansion
"Our goal for TechnoScan is to substantially grow the company by opening multiple new centres throughout Egypt and by expanding aggressively across the Middle East through a series of acquisitions.
"TechnoScan is the ideal platform to build an integrated pan-Middle Eastern medical diagnostic and imaging business."
Dr Khalil applauded the new partnership: "I am delighted to partner with Gulf Capital, and I am very optimistic about the future prospects of TechnoScan in Egypt and the region. TechnoScan will also benefit from the strategic alliance between Gulf Capital and GE Healthcare.
"As health care has traditionally been provided by the public sector, private sector participation in the provision of health care in Mena is on a fast-growth trajectory. TechnoScan's remarkable growth history and promising prospects reflect this trajectory."
Richard Dallas, Managing Director of Private Equity at Gulf Capital said: "Gulf Capital seeks to invest in market-leading health care companies that reduce healthcare costs, increase quality of care or service, enable payors and/or providers to improve efficiencies, and demonstrate proven business models with strong unit-level economics."
