Al Masah invests Dh1bn in Avivo as healthcare provider prepares for London IPO

Al Masah Capital expects to take Avivo Group to an IPO on the London Stock Exchange in 2017. Facundo Arrizabalaga / EPA

Al Masah Capital will invest Dh1.1 billion in its healthcare service provider Avivo Group as it seeks an initial public offering.

The Dubai-based private equity firm expects to take Avivo Group to an IPO on the London Stock Exchange by the end of 2017, according to Amitava Ghosal, the chief executive of Avivo Group. “We are building the spokes [with the expansion of clinics, pharmacies and laboratories] and once we do the IPO we will start building the hub, so then we will get majorly into hospitals,” Mr Ghosal said. “We will not exit.”

Formerly known as Healthcare Mena, Avivo owns and operates 32 healthcare facilities in Dubai, Abu Dhabi, Sharjah and Kuwait, including the National Hospital in Abu Dhabi and Conceive fertility centre in Sharjah.

With the investment, Avivo, which started in 2011 with capital from Al Masah, expects to expand in the UAE as well as Kuwait, Oman, Qatar and Saudi Arabia, Malaysia and Singapore.

It is also targeting new services such as diabetes management, urology and men’s health, plastic surgery and home rehabilitation services.

Avivo employs more than 200 doctors and more than 1,000 healthcare professionals, serving 1.3 million patients a year.

Al Masah has total assets under management of about US$1 billion.

“Today, the healthcare market is a fragmented one and what we see is a lot of consolidation rather than an increase in the number of healthcare facilities, a trend which is likely to continue for the next five years,” Mr Ghosal said.

Surging demand for healthcare services across the region is drawing in massive investment aimed at building new hospitals and clinics aimed at bridging the gap between demand and supply.

Despite the addition of hundreds of new hospital beds in the country there is still demand for more.

Hospital groups such as NMC and Al Noor have been active in acquiring medical centres and dental clinics.

“In both Dubai and Abu Dhabi there is a growth in [merger and acquisitions] in healthcare clinics, which are the feeder clinics for the hospitals to tap into the patient groups,” said Mansoor Ahmed, the director for healthcare practices at the consultancy Colliers International. “For private equity firms, with the slowdown in the real estate activity healthcare is a good sector to invest.”

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