Care signs agreement to buy hospital in Jeddah for SAR 193.2 mln

Logo of National Medical Care Co.

National Medical Care Co. (Care) signed on Sept. 8 an agreement with Saudi Medical Care Group (SMG) to purchase the entire ownership of Chronic Care Specialized Medical Hospital in Jeddah, according to a statement to Tadawul.  

The deal is valued at SAR 193.2 million and is subject to customary purchase price adjustments in light of the completion accounts mechanism under the agreement.  

The agreement contains customary representations and warranties provided by the seller and the purchaser, the statement noted.

The acquisition of Chronic Care Hospital (a one-person company) will help Care achieve its investment strategy via expansions in the healthcare industry, in addition to capturing growth opportunities in related markets. 

The deal will be fully financed from the company’s resources and bank facilities, and the relevant financial impact will likely appear upon completion of the deal as well as the ownership transfer.

The deal included related parties, namely, SMG as it is the seller and a major shareholder in the purchasing entity (the seller owns 49.20% of the purchasing entity’s capital and 100% of the target company’s capital). The nature of the interest is that the seller is a major shareholder in the purchasing entity and the sole shareholder in the target firm.

Related parties also include Saad bin Abdul Mohsen Al-Fadhli, Chairman of Care and a representative of SMG on Care’s board.

Ahmed Al-Qahtani is a board member at Care, Chairman of SMG, and a representative of SMG in Care.

Faraj Al-Qabani is a board member at Care, the Acting CEO of SMG and a representative of SMG in Care.

The deal completion is subject to a number of regulatory approvals including the approval of the General Authority for Competition (GAC), and the go-ahead of the general meetings of both SMG and Care.

Care appointed GIB Capital as a financial advisor, and the Law Firm of AlSalloum and AlToaimi as a legal advisor.

Any material updates will be revealed in accordance with the relevant regulatory requirements.

The target company is a healthcare company, headquartered in Jeddah, and offers services through a hospital in Jeddah, including comprehensive medical care, long term nursing care, hospice care, palliative care, and other medical services.

According to data available on Argaam, SMG owns 49.20% of Care.

The General Organization for Social Insurance (GOSI) and Hassana Investment Co. (HIC) transferred in March 2019 their ownership in Care at 38.88% to SMG, which is 53% owned by NMC Healthcare and 47% by GOSI.

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