Gulf Capital, one of the largest private equity firms in the Middle East, announced today that its portfolio company, TechnoGroup, has acquired a strategic stake in Consultant Radiology Centres (CRC), Saudi Arabia’s largest chain of diagnostic imaging centers. Gulf Capital shareholders consist of 300 of the most prestigious institutional and individual investors from the six GCC countries.
With this new acquisition TechnoGroup, which operates diagnostic imaging centres under the “TechnoScan” brand name, will be operating 17 diagnostic imaging centers in Egypt and Saudi Arabia. It is now acknowledged as the largest regional chain of diagnostic imaging centers in the Middle East. This latest investment is in line with Gulf Capital’s strategy of executing majority acquisitions in defensive yet fast-growing sectors in the region.
With a population of around 25 million, Saudi Arabia is the largest healthcare market in the GCC. Healthcare spending in Saudi Arabia has increased by 18% in 2009, according to the Economist Intelligence Unit (EIU) estimates, reaching US$20 billion. It is expected to continue on this trajectory as a result of aging population, alleviated health awareness, increased incomes, and higher incidences of lifestyle diseases. The Saudi government has declared healthcare as one of its top priorities, and has recently allocated SR 61 billion (US$ 16 billion) for healthcare spending in its latest government budget, up by 18% from a year ago.
Commenting on the successful acquisition, Dr. Karim El Solh, Chief Executive Officer of Gulf Capital, said: “We are pleased to complete the acquisition of the Consultant Radiology Centres and to firmly position TechnoGroup as the largest operator of diagnostic imaging centers in both Egypt and Saudi Arabia, the largest two Arab health markets with a combined population exceeding 100 million.
“The growth opportunities in both countries are considerable, and TechnoGroup is now ideally positioned to take advantage of the favorable growth trends for private healthcare providers in the region. This investment is in line with our focused strategy to invest in defensive yet fast-growing sectors such as healthcare and education, both of which clearly benefit from the regional population boom, increased government spending and growing insurance sector,” he added.
Mr. Richard Dallas, Managing Director of Private Equity at Gulf Capital said: "Gulf Capital seeks to invest in market-leading healthcare companies that reduce healthcare costs, increase quality of care or service, enable payers and providers to improve efficiencies, and demonstrate proven business models with strong unit-level economics. TechnoGroup 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."
Mr. Imad Ghandour, Executive Director in Private Equity at Gulf Capital, added: “The Consultant Radiology Centres is an outstanding acquisition for TechnoGroup as it allows the company to expand overnight into the all important Saudi market. With our Saudi foothold secured, we plan to roll-out TechnoGroup’s services throughout the Kingdom by opening new centers in key cities and expanding our services in existing ones. TechnoGroup will be offering its Saudi patients higher quality service and improved accessibility, especially in remote cities, and these services will be offered more efficiently and reliably to the benefit of the end-payer and the patient.
He concluded: “Both companies will also benefit from Gulf Capital’s recent strategic alliance with GE Healthcare. The agreement provides Gulf Capital with access to the full range of GE Healthcare’s international commercial offerings, solutions and services.”
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