Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
April 2014
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MENA Healthcare Sector
EXECUTIVE SUMMARY
It is often said that a healthy body bears a healthy mind. This saying holds great
significance for the MENA region, where several countries are targeting to become
knowledge-driven economies in their bid to sustain/enhance growth. However, in order
to become a knowledge-driven economy, MENA countries need to focus on the health
related aspects of the general populace.
Countries like Hong Kong, Singapore and Japan are perfect examples of how health and
economic prosperity go hand in hand. A Bloomberg survey ranked these countries,
which have firmly marked their place on the developed world map, the top three based
on the efficiency of their healthcare systems. Bloomberg rated the healthcare systems
using three criteria: (1) average life expectancy; (2) relative per capita cost of healthcare
or percentage of GDP per capita; and (3) absolute per capita cost of healthcare.
Basing our case on the above, we construe that if MENA countries wish to be counted
among the leaders of tomorrow, they need to ensure that their healthcare systems
function properly and the healthcare needs of their residents are satisfactorily met.
The MENA region spends about 4.0% of its GDP (or USD329 per person) on healthcare,
compared to 14.3% (USD3,373) by the Americas and 9.3% (USD2,217) by Europe. On an
average, the region allocates 8% of government expenditure toward healthcare, lower
compared to developed countries like the US (20%), Germany (19%), Japan (18%) and
the UK (16%). Within MENA, allocation toward healthcare is high, particularly in Jordan,
Tunisia, Bahrain, and the UAE. Unfortunately, the results so far have not been very
encouraging for most countries, except the UAE, which has been exhibiting good
progress.
We forecast the MENA healthcare market to be worth USD144 billion by 2020. The
government/public sector is likely to continue being the dominant force, holding 58% of
the market. The private sector healthcare market is forecasted to be worth USD61 billion
in 2020, more than double the size in 2011. The GCC healthcare market, covering six
countries, is projected to be worth USD69 billion by 2020. The private sectors share is
expected to reach 33% by 2020.
MENA has several positives, particularly its demographic profile. The healthcare needs in
the region are likely to increase significantly, led by a growing and ageing population. As
per the World Bank estimates for the 10-year period 201020, the elderly population
(defined as people over 65 years of age) in the MENA region is likely to witness the
quickest growth of 4.1% per annum, much higher than that in East Asia and Pacific
(3.9%), Southeast Asia (3.6%), Latin America and the Caribbean (3.3%), Sub-Saharan
Africa (3.1%), and Europe and Central Asia (1.4%). The rise in the elderly population
means more business for healthcare providers, as the elderly generally seek more
medical care and have more expensive health profiles than the younger populace.
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Prevalence of lifestyle related problems like diabetes and heart ailments is high in the
region. Incidence of Type 2 diabetes, particularly within GCC, has been found to be
unusually high relative to the rest of the world. According to the WHO, one in three
adults in the UAE is obese, and one out of five people live with diabetes. Additionally,
rising purchasing power in the MENA region, especially GCC, has positively impacted
healthcare spending. Per capita GDP in MENA is projected to grow 5.1% over 201020;
this is likely to further drive healthcare spending in the region.
The MENA healthcare market also has supply side attractiveness in the form of
inadequate healthcare infrastructure. The region lags behind developed countries in
terms of bed count. Taking the US as the benchmark, calculations indicate that the
MENA region would need to add nearly 360,000 beds by 2020. MENA is also far behind
the developed economies such as the UK, Germany, the US and Japan in terms of the
availability of doctors and healthcare professionals. Our calculations indicate that the
region is short of nearly 128,000 physicians, 294,000 dentists, and 1.6 million nurses and
midwifery personnel. By 2020, this shortage would rise to 150,000 physicians, 326,000
dentists and 1.8 million nurses and midwifery personnel.
Healthcare opportunities have attracted private equity firms to the region. Over 2004
13, the MENA healthcare sector witnessed 44 private equity buys worth USD1.59 billion
(disclosed value) at the rate of about 45 deals each year. During the period, Al Masah
Capital and Abraaj Group were the most active private equity firms in terms of the
number of buy deals. Al Masah Capital reported eight deals, while Abraaj completed six.
The UAE was the hub of private equity deal activity in the healthcare sector. Nearly 40%
of all deals announced in the MENA during 200413 were with companies based in the
UAE. The pharmaceuticals and diagnostics segments garnered the maximum number of
private equity deals during the period.
Given the favorable demographics, rising government support, higher per capita income,
we feel the MENA healthcare sector would witness higher private equity interest, going
forward.
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MENA ECONOMY
Overview of last years performance
The MENA region is estimated to have grown 2.1% in 2013 compared to 4.6% in 2012, as
The MENA region
grew 2.1% in 2013 lower-than-expected performance of oil exporting countries weighed on the regions
compared to 4.6% in economic growth. These countries were affected by weak global demand for oil amid an
2012 increase in non-conventional oil production in the US and relatively little change in the
price of oil despite supply disruptions in some parts of the MENA region.
The oil-rich GCC region grew 3.7% in 2013 compared to 5.2% in 2012. GDP growth of
non-GCC oil exporting countries also slowed down to 0.2% in 2013 vis--vis 5.6% in 2012.
Oil importing Increasing political uncertainties and delays in reforms affected the oil importing MENA
economies were economies. Despite this, oil importing economies are expected to have registered a GDP
affected by rising growth of 2.8% in 2013 on small improvements in tourism activity (especially in the first
political uncertainty
and delays in reforms quarter) and a recovery in exports in some countries.
Jordan
2.8 3.3 3.5
2.6 Kuwait
6.2 Bahrain
6.3
0.8 2.6 4.8 4.4 3.3
11 12 13 14E 2.1
11 12 13 14E
11 12 13 14E
Algeria
2.6 3.3 3.1 3.7 Qatar
13.0
6.2 5.1 5.0
11 12 13 14E
11 12 13 14E
UAE
3.9 4.4 4.0 3.9
Morocco
Saudi Arabia 11 12 13 14E
5.0 2.7 5.1 3.8 8.6
Egypt 5.1 3.6 4.4
11 12 13 14E
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GDP growth in 2014 would largely be driven by the oil exporting countries, including the
2014 looks promising
due to high oil prices GCC nations, which are likely to witness higher GDP growth of 4.1% in 2014 on high oil
and a steady flow of prices and a steady flow of government spending on development. Growth in non-GCC
government spending oil exporting countries is estimated to be 3.9% versus 0.2% over the same period.
on development
Saudi Arabia, the largest economy in MENA, is projected to grow 4.4% in 2014, led by an
increase in oil production as well as growth in its non-oil sectors. This indicates a
significant increase from the 3.6% growth projected by the IMF for 2013. Continued
government spending is likely to lend impetus to the non-hydrocarbon sector, which is
slated to contribute ~17% to total export earnings in 2015.
The UAE is expected to report a GDP growth of 3.9% in 2014, mainly driven by increased
The UAE is basking in
the glory of winning investments, a favorable demographic profile (rapidly growing population base), stable
the hosting rights for political environment, and improved trade relations with neighboring GCC states.
EXPO 2020, among Hospitality, manufacturing, trade, and logistics would be the primary drivers of growth in
others
the non-hydrocarbon sector during 2014. Preparations for the Dubai EXPO 2020 are also
expected to accelerate growth.
Egypts economy is expected to grow 2.8% in 2014 versus 1.8% in 2013. The countrys
economy has been projected to recover, following relative stability on the political front.
Economic assistance from Saudi Arabia, Kuwait, and the UAE helped ease pressure on
the economys fiscal position. The three GCC countries have pledged a total aid of USD12
billion to boost Egypts economy.
GDP growth in Qatar is Qatar is expected to report GDP growth of 5.0% in 2014, almost unchanged from 5.1% in
expected to remain 2013. Despite saturation in the hydrocarbon sector, growth is likely to be strong in
stable even in 2014 cement and metal production, driven by increasing construction activity and the rapidly
growing manufacturing sector. Moreover, the USD140 billion spend on infrastructure
projects, including construction of airports, roads and stadiums, partly in preparation to
host the World Cup in 2022, would facilitate growth.
Kuwait is expected to report 2.6% GDP growth in 2014, aided by quick decisions from
the new cabinet, expansion of the non-hydrocarbon segment, increase in government
The new cabinet expenditure, rising domestic consumption, and higher foreign direct investment. Political
would provide Kuwait wrangling, lower crude output, and lack of economic progress had hurt growth in 2013.
a jumpstart in 2014
GDP growth for Oman has been set at 3.4% for 2014 due to lower oil revenue. However,
rising government expenditure, a robust banking system (with a system-wide capital
adequacy ratio of 16% and gross non-performing loans at 2.1%), coupled with the
governments efforts to expand the labor-intensive SME sector, would drive growth of
the non-oil economy.
Bahrains economy is expected to grow 3.3% in 2014, due to strong performance by the
non-hydrocarbon sectors like tourism & leisure and finance. Increase in government
spending, coupled with aid received from GCC states, is likely to boost the non-
hydrocarbon segment.
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MENA Healthcare Sector
Healthcare spending in mature and high-income economies was much higher than that
in the lower-middle-income and low-income nations. In high-income economies (taken
as a group), total health expenditure increased to USD4,828 per capita in 2010 from
USD2,567 per capita in 2000, a compound annual growth rate (CAGR) of 6.5% vis--vis
the global average of 6.9%. In contrast, over the same period, health expenditure in
upper-middle-income countries increased at 12.8% per annum to USD384 per capita
from USD115. In high-income economies (taken as a group), total healthcare
expenditure stood at 12.4% of GDP in 2010 compared to 9.9% in 2000. The Africa,
Southeast Asia, and Eastern Mediterranean regions continued to spend the lowest on
healthcare as a percentage of GDP.
14.3% 3,373
Region of the Americas
9.3% 2,217
European Region
9.2% 941
Global Average
3.5% 920
GCC Region
6.4% 579
Western Pacific Region
4.0% 329
MENA Region
In 2010, the US spent The Americas (comprising 35 countries, including the US, Canada and Brazil), led the
17.6% of its GDP on regions in terms of healthcare spend as % of GDP and on a per capita basis. However,
healthcare compared
country-wise, the US was the worlds largest healthcare market; in 2010, it spent 17.6%
to 4% by MENA
of its GDP on healthcare.
In comparison, the MENA healthcare market is small and underdeveloped. In 2010, the
MENA region spent 4.0% of its GDP (about USD72 billion) on healthcare, or USD329 per
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MENA Healthcare Sector
person. Healthcare spending in GCC stood at 3.5% of the GDP (about USD40 billion), or
USD920 per person, in 2010.
Healthcare is one of the fastest growing sectors worldwide. The healthcare business
comprises clinics, laboratory and diagnostic facilities, pharmaceutical manufacturers and
retailers, hospitals, medical equipment manufacturers and health insurance companies.
However, the governments share of healthcare expenditure in MENA is lower than that
in the UK (83%), Japan (80%), and Germany (76%).
100%
17% 20% 24% 27%
80% 36% 40% 44%
54%
60%
0%
UK Japan Germany GCC MENA Global China US
Government Private
In Saudi Arabia, the largest economy in the MENA region, the government (through the
Ministry of Health) finances 69% of total healthcare costs. The governments share in
healthcare expenditure is high in Kuwait (82%), Oman (81%), Algeria (81%), Qatar (79%),
and the UAE (74%).
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4,656
3,967 3,543
941 920
329 222
17.6%
11.5%
9.2% 9.6% 9.2%
4.0% 5.0%
3.5%
64% 36%
Tunisia 5% Jordan 5%
Libya 5% Libya 5%
Oman 3% UAE 5%
Others 6% Others 4%
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MENA Healthcare Sector
In terms of patient bed capacity, government hospitals (which are generally thrice as big
as private hospitals) account for 82% of the overall beds.
Government hospitals in Kuwait, Qatar and Bahrain are relatively big in terms
of the number of patient beds.
Within the private hospitals category, average number of beds is on the higher
side in countries like Tunisia, Morocco, and Saudi Arabia.
Hong Kong, with an efficiency score of 92.6, topped the list based on an average life
expectancy of 83.4 years, a relative cost of healthcare of 3.8% of GDP, and healthcare
expenditure per capita of USD1,409. Singapore and Japan came second and third, with
efficiency scores of 81.9 and 74.1, respectively.
Healthcare systems of
Libya and UAE came Two countries from the MENA region Libya and UAE with ranks 12 and 13,
ahead of the UK, respectively, came ahead of developed countries like the UK, Canada, France, Germany
Canada, France, and the US. Despite large spending, the US was found to have one of the least efficient
Germany and the US
health systems in the developed world.
1
Bloomberg only considered countries with a population of at least five million, a life expectancy of
at least 70 years, and a GDP of at least USD5,000
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The GCC healthcare market, covering six countries, is obviously smaller, and is projected
to be worth USD69 billion by 2020. The private sectors share is expected to reach 33%
by 2020.
The GCC healthcare Exhibit 6: MENA and GCC healthcare market by 2020
market is projected to
be worth USD69 billion
(in USD billion)
by 2020
2011 52 29
MENA
2020 83 61
Government
Private
2011 34 13
GCC
2020 46 23
The market size estimation was carried out using data on population, healthcare
expenditure (both in terms of % of GDP and on per capita basis), ratio of government and
private expenditure on healthcare, GDP and inflation.
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MENA Healthcare Sector
According to the World Bank estimates for the 10-year period 201020, the MENA
The population growth
rate in MENA is among region is likely to witness a population growth rate of 1.4% per annum, much higher
the highest globally than the growth rates experienced in Southeast Asia (1.0%), Latin America and the
Caribbean (1.0%), East Asia and Pacific (0.5%), and Europe and Central Asia (0.2%). Only
Sub-Saharan Africa is projected to achieve a higher population growth rate of 2.4% over
the period.
In addition, given the improvements in life expectancy and decline in mortality rates,
demographic profile of the MENA region is likely to undergo a shift.
As per the World Bank estimates for the 10-year period 201020, the elderly population
(defined as people over 65 years of age) in the MENA region is likely to witness the
quickest growth of 4.1% per annum, much higher than that in East Asia and Pacific
(3.9%), Southeast Asia (3.6%), Latin America and the Caribbean (3.3%), Sub-Saharan
Africa (3.1%), and Europe and Central Asia (1.4%).
Life expectancy (at birth) for the MENA region has increased past 70 years from as low
as 47 years in 1960. Similarly, mortality rates in the region have dropped to below 25
infants per 1,000 live births from 260 in 1960.
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The WHO report also states that the number of deaths among the 3070 age group due
to cardiovascular diseases and diabetes for GCC stands at 339 per 100,000, nearly 2.5x
that of the US.
Mortality rates due to Exhibit 8: Mortality rates among adults due to cardiovascular diseases and diabetes
cardiovascular
diseases and diabetes 400
in MENA are quite (per 100,000 population)
339
high
300 273
245
199
200
137
102
91
100
68
0
GCC MENA Global China US Germany UK Japan
Countries within MENA with high mortality rates among adults due to cardiovascular
diseases and diabetes include Oman (504), Jordan (418), Saudi Arabia (401), Libya (320),
and Egypt (303).
Of late, MENA countries have increased their budgetary spends on healthcare. Aided by
MENA countries have
increased their large budgetary surpluses, GCC governments, in particular, have been allocating large
budgetary spend on sums to improve their healthcare infrastructures. Saudi Arabia, for instance, upped its
healthcare 2014 budgetary allocation for healthcare to USD28.8 billion from USD7.9 billion in 2009.
The Kingdom is building 34 new hospitals and healthcare centers, in addition to
continuing work at 132 hospitals and five medical cities currently under construction.
The five medical cities are expected to add 6,200 new hospital beds in the Kingdom.
Looking at the 19952010 period, it is easy to conclude that several of the MENA
countries like Jordan, Tunisia, Saudi Arabia, Morocco, Kuwait and Egypt have been
allocating higher percentage of their budgetary spend toward healthcare.
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MENA Healthcare Sector
Jordan, Tunisia, the Exhibit 9: Government expenditure on health as % of total government expenditure
UAE, and Kuwait have
increased allocations 20%
toward healthcare
16% Jordan
Tunisia
12% UAE
Kuwait
8%
Saudi Arabia
Morocco
4%
0%
1995 1998 2001 2004 2007 2010
However, despite this progress, MENA countries need to boost their budget allocations
for healthcare to make it comparable with the developed countries like the US (20%),
Germany (19%), Japan (18%) and the UK (16%).
Earlier this year, Sheikh Mohammed bin Rashid, Vice-President and Ruler of Dubai,
Health insurance has
become mandatory in signed a new law requiring compulsory health insurance for all the residents of Dubai.
Saudi Arabia and the The law will be applicable in phases. In the first phase, all companies with 1,000 or more
UAE employees would be required to provide their workers with health insurance by October
2014.
Similar directives were issued in Saudi Arabia and Abu Dhabi in 2005 and 2008,
respectively.
Exhibit 10: Health insurance timeline across Saudi Arabia and the UAE
Saudi Arabia makes Abu Dhabi extends the law to all expatriates Dubai makes
mandatory health health
insurance for all residents Abu Dhabi extends the law to all insurance
nationals mandatory for
Abu Dhabi makes
all residents
mandatory health
insurance for expatriate Dubai makes health insurance
workers mandatory for all expatriate
workers
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Health insurance is known to have several benefits: it not only reduces/cuts the burden
on governments and/or the population but also helps enhance the quality of health
services.
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MENA Healthcare Sector
Per capita GDP in MENA is projected to grow 5.1% over 201020; this is likely to further
drive healthcare spending in the region.
Governments in the MENA region are realizing the strong potential of medical tourism
The UAE is trying to
promote itself as a hub and rendering the required support to the industry. The UAE, particularly Dubai, is trying
for medical tourism to promote itself as a hub for medical tourism so as to attract foreigners to its hospitals
and specialized clinics.
Joint Commission International (JCI) in the US, one of the world's leading accreditation
organizations, has accredited nearly 100 hospitals in Saudi Arabia and the UAE. JCI
accreditation assures that a healthcare organization meets the highest international
benchmarks.
There are over 100 JCI Exhibit 11: Number of JCI accredited hospitals in MENA
accredited hospitals in
MENA Saudi Arabia 50
UAE 49
Jordan 10
Qatar 5
Lebanon 3
Egypt 3
Oman 2
Kuwait 2
- 10 20 30 40 50 60
In a bid to attract foreign patients, the UAE recently announced a new three-month
medical tourist visa, which can be extended twice.
2
Dr. Cornelia Voig, Adjunct Research Fellow, Curtin University
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MENA Healthcare Sector
Baltimore-based Johns Hopkins is currently associated with six hospitals in the MENA
Western healthcare
companies like Johns region, including three in the UAE (Al Rahba Hospital, Corniche Hospital, and Tawam
Hopkins, Mayo Clinic, Hospital); two in Saudi Arabia (Johns Hopkins Aramco Healthcare and King Khaled Eye
Cleveland Clinic are Specialist Hospital) and one in Lebanon (Clemenceau Medical Center).
present in MENA
Let us take an example. Cardiovascular disease is known to be the worlds leading killer
disease, accounting for 30% of deaths in 2010. Preventive care can help reduce the risk
of cardiovascular disease among the population. If people are made to cut their smoking
habits, improve diets and take other primary precautions, a major chunk of this
population and their money could be saved.
The UAE is trying to keep pace with these advancements. In an interview with Zawya,
the CEO of Saudi German Hospital-Dubai said that the UAE is solidifying its reputation for
healthcare excellence. The use of highly sophisticated world-class technology in its
health system is resulting in faster, smarter and safer treatments, leading to shorter
waiting times and reduced recovery periods for health ailments.
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MENA Healthcare Sector
The UAE is also promoting the use of Mobile health (or mHealth), which uses mobile
The UAE is also
promoting the use of technologies for health research and healthcare delivery. Having launched the use of
mHealth Android tablets in hospitals and specialty centers, the Dubai Health Authority (DHA) is
targeting to include the Electronic Medical Records system. The system would keep
updated patient record on a medical network, which could be used by doctors to check
on patients past records and provide better diagnosis.
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MENA Healthcare Sector
MENA would need to Exhibit 13: MENA has lesser number of hospital beds for its population
add nearly 360,000
beds by 2020 175
(Beds per 10,000 population) - Last available MENA would need to add 360k beds by 2020
150 Egypt
137
Morocco
125
Algeria
Saudi Arabia
100
82 UAE
75 Others
50 39
30 30 30
21 18
25
0
Japan Germany China US Global UK GCC MENA
3
High cost of healthcare leading to competitive disadvantages in UAE, Grant Thornton
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MENA Healthcare Sector
personnel per 10,000 people in the MENA region is much lower than in developed
economies.
Exhibit 14: MENA is behind developed countries in terms of availability of healthcare personnel
7.9 7.4
5.3
3.7 3.5 2.6
0.4
41
31 29 29
15
Taking the US as the benchmark, calculations indicate that the MENA region is short of
nearly 128,000 physicians, 294,000 dentists, and 1.6 million nurses and midwifery
personnel. By 2020, this shortage would rise to 150,000 physicians, 326,000 dentists and
1.8 million nurses and midwifery personnel.
By 2020, MENA would Exhibit 15: By 2020, MENA would largely need additional healthcare personnel in five countries
need to add 150,000
physicians, 326,000 100%
dentists and 1.8
million nurses and 80% Others
midwifery personnel
UAE
60%
Egypt
Saudi Arabia
40%
Tunisia
Algeria
20%
Morocco
0%
Physicians Dentists Nurses & midwifery
Findings reveal that by 2020, most of the healthcare personnel requirements would exist
in Morocco, Algeria, Tunisia, Saudi Arabia and Egypt.
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MENA Healthcare Sector
Exhibit 16: Private sector participation in the healthcare sector is low in oil exporting countries
Participation of the private sector was found to be low in almost all countries, except
Lebanon and Jordan, which are categorized as oil importers by the IMF. The major
reason for this can be the fact that the governments of hydrocarbon-rich nations (or oil
exporters, as per the IMF) have taken the responsibility of providing healthcare to its
populace, ignoring the need to seek private sector participation.
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MENA Healthcare Sector
The rate of PE buy Exhibit 17: PE activity in the MENA healthcare sector picked up during the last 34 years
deals in the MENA
healthcare sector has Disclosed value (USD mn)
expanded during 34
years NA 24 531 322 181 40 285 0.7 207 2.2
9
7
6 6
4 4
3
2 2
1
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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MENA Healthcare Sector
some of the NMC Group hospitals. Al Masah Capital acted through Healthcare MENA
Limited, its healthcare arm.
Other private equity firms that displayed high levels of activity in the MENA healthcare
sector included Global Investment House (four deals), TVM Capital (three), and Gulf
Capital (two).
Global Investment Exhibit 18: Most active PE funds/firms in the MENA healthcare sector (200413)
House, TVM Capital,
and Gulf Capital were
the other firms active
in the sector
UAE was the largest Exhibit 19: UAE was the largest recipient of PE deals in the MENA healthcare sector (200413)
recipient of PE deals in
the healthcare sector Number of Deals Value*
UAE 17 453
Egypt 10 900
Tunisia 5 1.0
Others 7 0.9
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Diagnostics segment Exhibit 20: Pharmaceuticals & diagnostics garnered the maximum number of deals (200413)
seems to have
attracted PE investors Number of Deals Value*
interest over the last
few years Pharmaceuticals 11 4
Diagnostics 11 108
Hospitals 6 284
Pharmacy 3 417
Others 13 780
In 2013, Abraaj Group sold its entire stake in Opalia Pharma to Recordati, an Italy-based
pharmaceutical company. Abraaj had originally invested in Opalia in 2009 through the Al
Kantara Fund. No financial terms were disclosed.
In 2013, Ithmar Capital completed a partial exit from its investment in Al Noor Medical
Company, the largest integrated private healthcare service provider in Abu Dhabi,
through an initial public offering (IPO) on the London Stock Exchange. In 2010, Ithmar
Capital had invested USD272.3 million in Al Noor Medical Company. Ithmar currently
holds ~25% stake in Al Noor Medical Company.
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SPIMACO, which was established nearly three decade ago, is engaged in production of
medicines and medical appliances for local consumption and export. The company
operates through 18 subsidiaries across Saudi Arabia, Ireland, Egypt and Algeria.
SPIMACO reported a net profit of USD71 million on revenues of USD346 million. In terms
of valuation, the company is available at a price-to-earnings multiple of 19.1 and a price-
to-book multiple of 1.5. Al Noor Hospitals Group, which went public in 2013, is a leading
healthcare provider in Abu Dhabi. The company reported a net profit of USD61 million
on revenues of USD365 million. In terms of valuation, the Al Noor Hospitals stock (listed
on the London Stock Exchange) is available at a price-to-earnings multiple of 26.6 and a
price-to-book multiple of 9.8.
Exhibit 21: Healthcare companies listed on the various stock exchanges in MENA
Market Cap Price-to-Earnings Price-to-Book EV-to-EBITDA
Company Country
USD million TTM Last TTM
SPIMACO Saudi Arabia 1,511.1 19.1 1.5 23.1
Astra Industrial Group Saudi Arabia 1,180.9 15.5 2.3 21.4
Mouwasat Medical Services Saudi Arabia 1,119.9 22.9 4.7 16.5
Dallah Healthcare Holding Saudi Arabia 1,035.2 24.1 3.3 22.4
Gulf Pharmaceutical Industries UAE 869.5 12.3 1.7 13.5
National Medical Care Saudi Arabia 726.5 26.4 3.3 20.9
Egyptian Int. Pharmaceuticals Industries Egypt 536.5 10.4 2.1 7.7
Medicare Group Qatar 517.9 16.5 2.2 14.4
Advanced Technology Co Kuwait 479.6 N/A 3.5 13.3
Gulf Medical Projects Co UAE 403.9 16.1 1.5 15.2
Marocaine Ste de Therapeutique Morocco 300.5 17.6 5.3 11.9
YIACO Medical Co Kuwait 200.0 14.4 1.7 11.8
Medical Union Pharmaceuticals Co Egypt 153.1 6.3 1.2 6.5
Promopharm Morocco 98.9 11.0 2.1 4.4
Safwan Trading and Contracting Co Kuwait 86.1 13.2 1.9 12.9
Average 16.1 2.6 14.4
Source: Thomson Reuters, Data as of Mar 19, 2014
Our data points that the Egypt Stock Exchange (CASE) has the highest number of
healthcare companies listed on the bourse. The six healthcare companies have a
combined market capitalization of ~USD850 million. Saudi Arabia (Tadawul) follows next,
with five companies worth ~USD5.6 billion.
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MENA healthcare The MENA healthcare sector weathered the global financial crisis of 200708 relatively
sector weathered the well.
global financial crisis
of 200708 For instance, during FY 2008, Kuwait-based Advanced Technology Co witnessed a 10.3%
jump in revenues and a 6.9% rise in operating profit. Over the same period, Saudi
Arabia-based Mouwasat Medical Services Co reported a 13.4% growth in revenues and a
14.7% rise in operating profit.
Medical Union Pharmaceuticals Co, Safwan Trading and Contracting Co and Kahira
Pharma and Chemical Industries also witnessed double-digit growth in their revenues
and operating profit over the period.
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With the right ingredients of high population growth, increased life expectancy,
Healthcare in MENA
represents a huge improved literacy rates, prevalence of lifestylerelated diseases, aspiration for better
opportunity quality medical services and greater awareness of health insurance, healthcare in MENA
represents a huge opportunity. We estimate the MENA healthcare market to be worth
USD144 billion by 2020.
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APPENDIX
Country-wise estimate of the healthcare markets size across the MENA region in 2020 is
given below.
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Disclaimer:
This report is prepared by Al Masah Capital Management Limited (AMCML). AMCML is a company incorporated
under the DIFC Companies Law and is regulated by the Dubai Financial Services Authority (DFSA). The
information contained in this report does not constitute an offer to sell securities or the solicitation of an offer to
buy, or recommendation for investment in, any securities in any jurisdiction. The information in this report is not
intended as financial advice and is only intended for professionals with appropriate investment knowledge and
ones that AMCML is satisfied meet the regulatory criteria to be classified as a Professional Client as defined under
the Rules & Regulations of the appropriate financial authority. Moreover, none of the report is intended as a
prospectus within the meaning of the applicable laws of any jurisdiction and none of the report is directed to any
person in any country in which the distribution of such report is unlawful. This report provides general information
only. The information and opinions in the report constitute a judgment as at the date indicated and are subject to
change without notice. The information may therefore not be accurate or current. The information and opinions
contained in this report have been compiled or arrived at from sources believed to be reliable in good faith, but no
representation or warranty, express, or implied, is made by AMCML, as to their accuracy, completeness or
correctness and AMCML does also not warrant that the information is up to date. Moreover, you should be aware
of the fact that investments in undertakings, securities or other financial instruments involve risks. Past results do
not guarantee future performance. We accept no liability for any loss arising from the use of material presented in
this report. This document has not been reviewed by, approved by or filed with the DFSA. This report or any portion
hereof may not be reprinted, sold or redistributed without our prior written consent.
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