Abu Dhabi-based healthcare provider Burjeel Holdings will sell 11 percent of the company in an IPO, becoming the first privately held company to go public in the UAE this year.
The company plans to sell 550.7 million shares, it said in a statement Monday. The offering includes 350.3 million shares sold by VPS Healthcare Holdings, which owns 79.8 percent of Burjeel.
Of the shares offered, 10 percent are to be allocated to the first tranche and 90 percent to the second tranche.
The subscription period for institutional and private investors begins on September 30th and ends on October 4th. The company’s shares will start trading on the Abu Dhabi Securities Exchange on October 10th.
On September 19, Abu Dhabi’s International Holding Company, the UAE’s largest company by market value ($178 billion), bought a 15 percent stake in Barjeel.
Burjeel Holdings was founded in 2007 by Dr. Shamsheer Vayalil established and has a network of approximately 61 facilities including hospitals and medical centers as well as pharmacies and other related services in the United Arab Emirates and Oman. The company plans to enter Saudi Arabia with investments of up to USD 1 billion planned in the Arab world’s largest economy through joint ventures and public-private partnerships.
“Our long-term vision, focused on improving access to quality healthcare and clinical excellence across the region, has driven our growth over the past 15 years,” said Dr. Vayalil.
“Today’s announcement builds on our partnership with IHC, which will have a transformative impact on Burjeel Holdings through the addition of new capabilities, capital and access to new markets.
“As healthcare spending continues to rise across the region, Burjeel Holdings is strongly positioned to capitalize on our focus on delivering complex, specialized medicine to all socioeconomic groups through a targeted multi-brand strategy.”
Burjeel posted nearly Dh3.4 billion in revenue in fiscal 2021, showing a compound annual growth rate of 18 percent from 2019 to 2021.
The company plans to start paying cash dividends beginning in 2023, based on an expected payout ratio of 40 to 70 percent of net income, depending on the required investments for additional growth plans.
In the absence of attractive investment opportunities, it will pay dividends at the high end of the payout ratio or possibly above, it said.
The first interim dividend is expected to be paid in the second half of 2023 based on the net income for the first half of 2023.
In contrast to the capital markets in the US and Europe, which have plunged into declining territory, the UAE has seen a flurry of IPOs, with various state-owned companies listed.
The ADX, the second-largest stock market in the Arab world, saw liquidity and foreign investment surge in 2021 on fresh listings, anchoring it as one of the world’s top-performing stock indicators in 2021.
IPOs lifted the market value of the ADX to Dh2.25 trillion (US$614 billion) at Friday’s close.
Listings in the Abu Dhabi market this year include Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, and Abu Dhabi Ports Group, the operator of industrial cities and free zones in the emirate.
Nine companies listed last year, including Adnoc Drilling and Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined, Alpha Dhabi, IHC’s real estate and construction company, and Yahsat, Mubadala Investment Company’s satellite operator.
Last year, Abu Dhabi also announced a Dh5 billion IPO fund to encourage and support private companies to list on the local stock exchange.
Investments in the UAE healthcare sector have increased since the Covid-19 pandemic. Businesses are consolidating assets to scale and adding additional services, including diagnostics, testing and other support services, to better serve patients and increase market share.
Dubai-listed investment firm Amanat Holdings acquired the Cambridge Medical and Rehabilitation Center for $232 million last year in one of the region’s biggest healthcare deals.
In January, Abu Dhabi-based holding company ADQ merged its healthcare subsidiaries with Alpha Dhabi’s Pure Health Medical Supplies to streamline its portfolios and create the UAE’s largest healthcare provider.
Updated September 26, 2022 at 5:17 am
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