Sunday, 7 February 2021

M&A and an IPO in the works for Speed + Savola looking at an Egypt acquisition

Speed Medical closing in on Al Safwa Hospital acquisition, says it will spin-off hospitals arm ahead of IPO: A consortium led by Speed Hospitals — a subsidiary of diagnostics and healthcare firm Speed Medical — is looking to acquire a 100% stake in Six of October’s New Al Safwa Specialized Hospital in a transaction worth c. EGP 185 mn, according to a disclosure (pdf). Speed Hospital itself wants at least 50% plus one share of Al Safwa along with management rights, with the rest of the equity to be placed with unnamed local and regional investors.

Among those investors: Sister company Prime Speed Medical Services, which said in a regulatory filing (pdf) that it’s in for 10% of New Al Safwa Specialized at a cost of EGP 18.5 mn.

EFG Hermes Leasing is providing Speed Hospitals with financing worth EGP 92.5 mn to complete the transaction. Our friends at Pharos Holdings are said to be advising on the transaction.

Speed Hospitals could IPO within three years: Speed Medical is looking to grow its hospitals arm before spinning off the division ahead of a potential IPO, which is expected to happen at some point in the coming three years, according to the disclosure. Speed Hospitals plans to raise Al Safwa Hospital’s capacity to 150 beds from a current 67, while also growing its own facility in Obour City to 140 beds. The company wants to have 300 beds under a single corporate umbrella by the time of the IPO. Speed Medical became last year the first company to make the jump from Nilex baby bourse to the EGX.

Attractive healthcare sector goes red hot: This is the second major healthcare M&A we’ve heard of so far in 2021 following the Cleopatra Hospital – Alameida merger late last year. A consortium made up of Mabaret Al Asafra Hospitals and Africa-focused investment firm Tana Africa Capital are reportedly bidding on Abu Dhabi Commercial Bank’s (ADCB) 51.5% stake in Alexandria Medical Services.

IN OTHER M&A NEWS- Saudi Arabian food conglomerate Savola Group is considering acquiring food companies in Egypt and other markets as part of its regional expansion in Egypt, Savola Foods’ chief strategy officer Mohamed Badran tells Masrawy. The target of the acquisition is a company that produces products that Savola currently does not have market share in, he added. He hopes that the acquisition — which comes as part of the company’s five year plan to expand its footprint in the region — will be completed by the end of the year.

CLARIFICATION- An earlier version of this story suggested that Savola is eyeing a particular Egyptian food company for its acquisition plan. The Saudi conglomerate is currently studying several potential targets.

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