United States venture capital firm the Ascent Group is considering the listing of two Middle East healthcare businesses on the Dubai International Financial Exchange (DIFX), as it looks to capitalise on the region's booming medical sector, a top executive said.
The firm is prepared to pump up to $15 million (Dh55m) into medical research and development facilities in Oman and Jordan to ready them for an initial public offering, according to Peggy Farley, CEO of Public Capital Markets at Ascent.
Previously, the group took Minnesota-based firm InStent public on the New York Stock Exchange for $210m.
"Just as we went public with InStent using New York, so too could we see any of the projects we've started here going public on the Dubai market. We see that relationship developing for sure," said Farley. "To fund a combination of Jordan and Oman companies to get them to the point where they could go public would cost $10m to $15m. To carry out the same process in the US would cost up to $20m."
The Ascent Group, thro-ugh its two Ascent Medical Technology Funds, has financed $500,000 of the Philadelphia Biological and Medical Technology Product Development Centre in Jordan and also invested $3.5m towards the Salalah Medical Device Manufacturing facility in Oman. "Our tapping the DIFX makes sense because our companies are based in the region," added Farley.
At its Jordan and Oman sites, Ascent focuses on developing technologies covering medical fields including cardiovascular, neurology, women's health, infectious diseases and diabetes.
Ascent previously invested a total of $6m into Minnesota-based InStent, a company set up in 1992, which it took public for $210m and eventually sold for more than $700m after four years.
In Minnesota, just five per cent of the city's gross national product (GNP) was in healthcare 50 years ago, whereas currently it is 45 per cent. Ascent expects Jordan's healthcare spend to rise to 25 per cent over the next five years, up from just under six per cent currently. In Oman, healthcare spend is less than five per cent today but is expected to grow to 15 per cent of GNP in 10 years.
The GCC's healthcare market is expected to balloon from $15bn to $17bn today to $60bn by 2025, fuelled by rising instances of health problems and chronic under supply, according to private equity firm Abraaj Capital.
An IPO of the two ventures in Jordan and Oman would form part of its strategy to utilise low labour and rental costs outside the UAE with the added global pull of Dubai as a financial centre.
Farley said renting office space in Dubai was 10 times more expensive than in Amman. "Dubai is a place where marketing can occur, and the marketing will occur worldwide. You've got super stuff here like PR, advertising, telecoms and strong publications. This will be the Madison Avenue of the world instead of New York. In Oman, the land and rent are cheap and it has a free trade agreement with the US. So technology development in the UAE is not going to happen," she said.
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