(Bloomberg) — Saudi hospital group Dr. Soliman Abdul Kader Fakeeh Hospital and its shareholders plan to sell a 21.5% stake in its Riyadh initial public offering, as listings in the kingdom pick up after a short hiatus.
The company will sell 30 million new shares while the founding family will offer 19.8 million shares in the IPO, according to a statement on Wednesday. Fakeeh Care Group has hired HSBC Holdings Plc as sole financial adviser and joint bookrunner together with anb capital and EFG Hermes. Moelis & Co. is advising the selling shareholders.
Fakeeh Care Group joins water treatment firm Miahona Company in announcing its IPO plans, about a month after flour milling company Modern Mills Co. went public in a $314 million share sale. The planned listings come after tensions in the Middle East flared up temporarily earlier this month after Israel and Iran openly struck each other for the first time.
Still, the impact on the Persian Gulf’s IPO market has been muted. In Dubai, the IPO of high-end supermarket chain Spinneys 1961 Holding plc was covered within minutes of being launched.
The company plans to take institutional investor orders from May 2 to May 8, according to its prospectus. Retail investors will be able to bid from May 21 to May 22. The company plans to use the proceeds from the sale of new shares to finance its growth strategy.
“We’re in the right industry at the right time,” said Dr. Mazen Soliman Fakeeh, president of Fakeeh Care Group, in an interview. “Health care is very promising in Saudi Arabia, especially with Vision 2030 and the plans to privatize and corporatize and expand on public and private insurance,” he said, referring to Crown Prince Mohammed Bin Salman’s multi-trillion-dollar plan to transform the economy.
Expanding Care
Fakeeh Care Group was founded in 1978 in Jeddah. It now has 835 beds across four hospitals and five medical centers, it said in the statement. The group’s revenues reached 2.3 billion riyals ($613 million) in 2023, up from 1.7 billion riyals in 2020. Its profit for last year was 232 million riyals.
It plans to expand to seven hospitals with 1,675 beds and nine medical centers by 2028, to capitalize on the kingdom’s growing and ageing population, which is expected to reach around 40 million by 2030, the company said.
Saudi IPOs, like those in the rest of the Gulf, have typically been slam dunks when it comes to their share price performance thanks to the overwhelming levels of demand from investors, particularly local and regional ones.
In the past 12 months, just one IPO in the kingdom raising at least $50 million is in the red, Morabaha Marina Financing Co., data compiled by Bloomberg show.
(Updates with CEO comments in sixth paragraph, expansion plans in eighth)
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Published: 25 Apr 2024, 12:26 AM IST