BUS-MEDICAL-ROOM-(Read-Only)
Emirates Investment Bank has been targeting large transactions for healthcare assets in Saudi Arabia and UAE. Image Credit: Supplied

Dubai: Emirates Investment Bank is advising clients on a slew of healthcare deals in Saudi Arabia and the UAE for private placement or outright sale of an asset, with the deal size pegged at Dh500 million-Dh800 million, Husam Kutaifan, managing director of Investment Banking at Emirates Investment Bank told Gulf News.

These transactions come close on the heels of a deal that EID advised, where Gulf Capital, an Abu Dhabi-based PE firm managing more than $3 billion (Dh11 billion), bought a 70 per cent stake in health aesthetics firm Medica.

“We are quiet active in Saudi Arabia and UAE in hospitals, clinics, specialty clinics. We are advising a few healthcare providers in Saudi Arabia to raise capital [for a] deal size of $100 million. We are involved in a couple of transactions in the UAE. It’s an private equity sale of a privately held company. It would be a a single partner coming in and buying in a significant minority or majority stake,” Kutaifan said.

We are advising a few healthcare providers in Saudi Arabia to raise capital [for a] deal size of $100 million.

- Husam Kutaifan, MD of investment banking

EIB is also working with a Jordan-based digital healthcare company to help them raise $15 million-$20 million in capital.

“We are getting traction... we are getting good response. They want to raise money to expand. We are in talks with major healthcare companies for stake sale in the firm,” he added.

The investment bank is also involved in a “high-profile transaction” whose deal size could be Dh800 million.

“We have received offers with a deal size of Dh800 million. It’s an outright sale of asset of a large company,” he added.

They are also advising on a transaction in the infra business of district cooling, which may be valued at Dh400 million.

“We are seeing pressure on interest rates so people are looking for definite yields.”

Challenges:

Kutaifan admitted the private equity (PE) exits have been challenging, given the soft market conditions.

“Private equity exits are still doable provided you have the size and the story. I don’t think any portfolio companies held by private equity would be able to list on local markets anytime soon. If they have enough size they can actually list in London. PEs are looking to exit through secondary sale or stake sale to a strategic buyer,” he said.

Another challenge for PE firms is the overhang of the Abraaj saga.

Abraaj had been the largest leveraged buyout firm in Dubai, but later run into rough weather and eventual closure after Bill and Melinda Gates Foundation accused the firm of commingling of its $1 billion healthcare fund.

“Abraaj has impacted money raising efforts internationally. Demand for PE investments from endowments, pension fund and funds of funds in the region has been negatively impacted by Abraaj,” he said.

Overseas investors are preferring to put their money in specific identified deals rather than blind pools, he added.