EGX- and LSE-listed Integrated Diagnostics Holding (IDH) is set to enter the Saudi healthcare market with a greenfield JV after agreeing to set up a local diagnostics company with Saudi firm Izhoor Medical, it said in a statement (pdf) yesterday. The joint venture will be 50% owned by IDH and its Jordanian subsidiary, Biolab, and 50% owned by Izhoor, a unit of the high-profile Saudi retailer Fawaz Alhokair.

What they’re building: “A full-fledged pathology diagnostic services provider offering a wide array of diagnostics services” on a national basis, the statement said.

Investment in the JV will approach USD 20 mn over the next four years, with the business set to start operations sometime between February and April 2023 once regulatory approvals and licenses are in place. The move will see IDH add Saudi to a footprint that already includes Egypt, Jordan, Sudan and Nigeria.

The transaction makes good sense for IDH: The Saudi diagnostics market looks set to be one of the fastest-growing in the Middle East and Africa over the coming six years, IDH says, citing market data. Riyadh is looking to see more private-sector players in the labs industry to serve the country’s population, which is growing at about 2% a year. In addition to rising state spending on healthcare and a parallel privatization drive, Saudi is requiring private-sector employees to offer health ins. for their employees. The JV will also have access to Fawaz Alhokair’s extensive network of malls in KSA, where it is the largest operator in the country.

What they said: “This transaction is directly in line with our long-term regional expansion strategy which sees us pursue high-growth markets where our platform and proven expertise are well-suited to deliver high-quality care to as many patients as possible,” said IDH CEO Hend El Sherbini.

ADVISORS- IDH and Biolab have appointed Khalifeh & Partners to act as their legal advisors on the transaction, while Izhoor were represented by the Law Firm of Wael A. Alissa in association with Dentons. Neither side reported being advised by investment bankers on the transaction.