General Electric has invested in a $100 million (Dh367m) Dubai fund that hopes to set up the region’s first “comprehensive” medical network, it was revealed at the Arab Health Congress yesterday.
GE Healthcare, a $17 billion unit of the New York-listed giant, will partner with the Shefa Healthcare Fund in tapping Middle East and North Africa’s “fragmented” medical sector.
Shefa – a Shariah-compliant private equity fund managed by the Dubai International Financial Centre-registered Injazat Capital – plans the acquisition of 15 to 20 mid-sized hospitals at a cost of about $3-10m each.
Although the size of GE’s investment was not disclosed, it will not exceed $35m as 65 per cent of the Shefa Fund has already been allocated. Other investors include the Saudi Health Investment Company ($37.5m), International Finance Corporation ($15m), and Zabeel Investments ($2m).
“Our aim is to create a network of hospitals under the Shefa brand, and to utilise economies of scale,” Fawzi Zeine, head of fund management at Injazat Capital, told Emirates Business.
“Healthcare is very fragmented in this region: when you speak to hospital owners, you find that they grew up from clinics. They do a good job of medicine, but they’re not good managers,” Zeine added.
GE Healthcare – with which Shefa has been in negotiation with for four to five months – will provide technical support in the operation of the hospitals.
“The Middle East region has all the key drivers that are favourable for the growth of GE businesses,” said GE’s Chairman and CEO, Jeffrey Immelt, during his visit to Dubai.
“We are pleased to support Shefa Healthcare Fund’s initiatives that will help transform regional healthcare delivery,” he said in a press statement.
Shefa is currently in the process of buying a hospital in Tunisia, and also plans similar acquisitions in Jordan, Lebanon, Egypt, and – “at a later stage” – the UAE.
The fund seeks majority stakes in the healthcare operators, or “minority stakes with adequate protection rights”. Eventually, it plans to exit these healthcare investments through possible stock market listings or sale to private buyers or other investment funds.
“We’re only planning to buy one hospital in each country, but there will be referrals between them,” said Zeine, adding that most
hospitals will be of 80 to 160-bed capacity.
Zeine said Shefa is also looking to invest in a health management company, and is currently undertaking due diligence on an undisclosed Spanish firm.
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