Dallah's market share seen up 2% on Al-Salam, Al-Ahsa hospitals acquisition: CEO

Tarek Alkasabi, Dallah Healthcare Co.'s CEO

Dallah Healthcare Co.'s acquisition of Al-Salam Hospital and Al-Ahsa Hospital is a key step towards strengthening its Eastern Province foothold, said CEO Tarek Alkasabi, expecting the company's Saudi market share to rise 2% post-takeover.

Eastern Province is deemed a key strategic market for Dallah, being the third largest in Saudi Arabia. The acquisition of the two hospitals, being a calculated step, is one of the strategies aimed at strengthening Dallah's presence in the region, he told CNBC Arabia.

The top executive also indicated that existing beds in the company's hospitals currently amount to more than 1,800. The count shall exceed 2,500 beds following the acquisitions, fueling growth in revenues and profits.

Following the takeovers, Al-Nakheel Hospital’s subspecialities will be gradually transferred to Al-Ahsa and Al-Salam Hospitals, based on market demand and the needs of Eastern Province’s patients. Further, Dallah, with its operational expertise, will add more specialized clinics to the to-be-acquired hospitals, driving elevated earnings and revenues in the near term, said the CEO.

Alkasabi also stated that Al-Salam Hospital is ready to expand and provide distinguished services, thanks to its robust foundation and broad bed capacity. Additionally, more medical staff will be gradually recruited as necessary.

The company's vision entails building or acquiring new hospitals. Takeovers save time in terms of land purchase, designs and construction works, which typically take about five years. Moreover, hospitals evidently make losses in the initial two years of operation.

Therefore, by buying out two already-existing facilities such as Al-Salam Hospital and Al-Ahsa Hospital, Dallah should overcome such hurdles, hence generating profits by next year when the two hospitals hit the third year of operation, the CEO explained.

According to data available to Argaam, Dallah signed, on Aug. 19, a binding acquisition and subscription agreement with AYYAN Investment Co. to purchase the latter’s stakes in Al-Ahsa Medical Services Co. and Al-Salam Medical Services Co. The agreement includes acquiring 97.4% of the capital of Al-Ahsa (which owns Al-Ahsa Hospital in Al-Ahsa) and 100% of the capital of Al-Salam (which owns Al-Salam Hospital in Al-Khobar).