Istanbul: The Abraaj Group, a private equity firm operating in growth markets, announced on Monday that it has entered into an agreement to divest its 50 per cent shareholding in Acıbadem Sigorta to Khazanah Nasional Berhad, the Government of Malaysia’s strategic investment fund.
Under the terms of the agreement, Khazanah shall acquire a combined 90 per cent shareholding in Acıbadem Sigorta from both Abraaj and Turkey’s Aydınlar family in exchange for a cash consideration. Mehmet Ali Aydınlar will retain a 10 per cent stake in the company and will remain as chairman of Acıbadem Sigorta. Further financial details of the transaction were not disclosed.
Acıbadem Sigorta is a leading provider of health insurance services for corporate and individual clients in Turkey, and has the second largest market share in the industry.
The Abraaj Group, through its funds, has helped Acıbadem Sigorta become one of the fastest growing and most profitable health insurance companies in Turkey, achieving over 30 per cent annual premium growth over the past two years and one of the highest returns on equity in the market.
The company grew its gross written premiums from 131 million Turkish lira in 2010 to 234 million lira in 2012, improving its market share position in health insurance from sixth position with 7 per cent of the market in 2010 to second position with more than 10 per cent of the market in 2012. Net income grew from 1 million lira in 2010 to 27.9 million lira in 2012, with improved profitability driven by enhanced underwriting and claims management capabilities as well as improved efficiency driven by a strong focus on the management of operating expenses and a best-in-class IT platform.
Abraaj’s investment in Acıbadem Sigorta began in 2007, through a partnership with Mehmet Ali Aydınlar, the Chairman and CEO of Acıbadem Healthcare, one of Turkey’s largest private healthcare groups. In January 2012, Abraaj divested its entire shareholding in Acıbadem Healthcare to IHH Healthcare Berhad and Khazanah in exchange of cash and shares in IHH, while retaining its 50 per cent shareholding in Acıbadem Sigorta. Abraaj later sold its entire shareholding in IHH in July 2012 at IHH’s initial public offering, which raised $2 billion, making it the third largest IPO of 2012 after Facebook and Felda Global.
The transaction is expected to be completed following regulatory approvals in Turkey and Malaysia.