Cleopatra Hospital to Acquire Alameda Health’s Egypt Assets

Cleopatra Hospital Group, the biggest Egyptian private hospital operator by number of beds, agreed to buy Alameda Healthcare Group’s assets in the country in one of the largest African health-care transactions this year.

The board of Cleopatra has approved the planned purchase, according to a statement Sunday, which confirmed an earlier Bloomberg News report. Cleopatra plans to partially fund the deal by issuing convertible loan notes to Alameda controlling shareholder Fahad Khater.

The deal could value Alameda at about $450 million to $500 million including debt, according to a person familiar with the matter. Khater, Alameda’s founder, will become the second-largest shareholder in the combined group with an expected stake of about 25% after the transaction, the person said, asking not to be identified because the information is private.

Cleopatra said the new shares will have a lock-up period of 12 months from the conversion date. After the deal closes, Khater will become a “key and strategic shareholder” in Cleopatra and will take the title of vice chairman of the Egyptian company, in addition to his role as chairman of the Alameda hospitals.

The deal would combine two of Egypt’s biggest private medical providers at a time when the coronavirus pandemic has raised the importance of specialized care. Investor appetite for health-care assets in the Middle East and Africa has grown in recent years due to the region’s increasing population and a shortage of public services.

More Dealmaking

Saudi pediatrician Sulaiman Abdulaziz Al-Habib raised 2.63 billion riyals ($701 million) through an initial public offering of his eponymous company earlier this year. Meanwhile, two of the Middle East’s largest sovereign wealth funds are weighing a joint purchase of Bausch Health Cos.’s Cairo-based drug unit, Bloomberg News reported in November.

Cleopatra, which has a market value of about $481 million, has grown through acquisitions since it was set up in 2014. The company operates six hospitals with nearly 800 beds in total, according to its website.

After the deal closes, the combined bed capacity would climb to around 1,450, representing 15% of the total in Greater Cairo and around 4% nationwide, Ahmed Badreldin, Cleopatra’s chairman, said in a statement.

Alameda’s network includes tertiary care hospitals in Cairo, as well as diagnostic centers, outpatient clinics and specialist care facilities.

EFG Hermes is acting as financial adviser while Freshfields Bruckhaus Deringer and Zulficar & Partners are acting as legal counsels to Cleopatra. White & Case and Matouk Bassiouny & Hennawy, ALC Alieldean, Weshahi & Partners and Dechert LLP are acting as legal counsel to Alameda Healthcare Group and CI Capital is acting as their financial advisers.

©2020 Bloomberg L.P.

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