Gulf Capital, one of the largest private equity firms in the Middle East, announced today that it has acquired a 75% interest in TechnoScan, the largest chain of medical diagnostic imaging centers in the Middle East. TechnoScan, founded in 1995 in Egypt, currently operates 15 imaging centers, 13 of which are wholly owned and 2 of which are owned in partnership with other investors. The TechnoScan centers were founded by Dr. Ossama Khalil, a well known and respected Egyptian physician. Dr. Khalil remains as a co-owner of the Company and member of the Board of Directors.
With population of around 79 million, Egypt is the second largest healthcare market after Saudi Arabia. Healthcare spending in Egypt has increased by 22% in 2009 according the EIU estimates to reach $13.3 billion, and is expected to continue on this trajectory as a result of aging population, alleviated health awareness, increased incomes, and most importantly increased incidences of lifestyle diseases.
Imaging, which constitutes between 10% to 15% of private healthcare spending, is expected to grow substantially as well. Demand growth will require substantial investment by the private sector, and TechnoScan -- as the largest private chain -- will be a primary beneficiary of this opportunity. For example, the number of MRI scans in Egypt is 7000 per million (compared to 64000 in developed countries), and is expected to grow by 15% to 20% in the next two years.
TechnoScan will gain substantially from the strategic alliance between GE Healthcare and Gulf Capital announced last month. GE Healthcare will be offering strategic support to TechnoScan, and will collaborate closely in the roll out and new services.
Commenting on the successful investment, Dr. Karim El Solh, Chief Executive Officer of Gulf Capital said: “We are pleased to have acquired a majority interest in TechnoScan, the clear leader in the medical diagnostic and imaging industry in the region. Healthcare represents a rapidly growing sector, not only in Egypt, but throughout the MENA region. This investment follows our stated strategy of investing in defensive yet high growth sectors that benefit from the regional population growth, increased government spending and increased private sector participation. Our goal for TechnoScan is to substantially grow the company by opening multiple new centers throughout Egypt and by expanding aggressively across the Middle East through a series of acquisitions. TechnoScan is the ideal platform to build an integrated pan-Middle Eastern medical diagnostic and imaging business.”
Dr. Osama Khalil applauded on the new partnership: “I am delighted to partner with Gulf Capital, and I am very optimistic about the future prospects of TechnoScan in Egypt and the region. TechnoScan will also benefit from the strategic alliance between Gulf Capital and GE Healthcare. As healthcare has traditionally been provided by the public sector, private sector participation in the provision of healthcare in MENA is on a fast growth trajectory. TechnoScan’s remarkable growth history and promising prospects reflects this trajectory.”
Mr. Richard Dallas, Managing Director of Private Equity at Gulf Capital concluded: “Gulf Capital seeks to invest in market-leading healthcare companies that reduce healthcare costs, increase quality of care or service, enable payors and/or providers to improve efficiencies, and demonstrate proven business models with strong unit-level economics. TechnoScan represents such a company and meets all our healthcare investment criteria. We are working closely with management on expanding this platform across the Middle East and on establishing international partnerships to support this growth. Given the Firm’s ambitious growth plans, leadership position, strong management and continued partnership with Dr. Khalil, we are confident that Technoscan will emerge as the regional leader in its field”.