NMC Health closes agreements to create Saudi Arabia joint venture

NMC Health, alongside the General Organization for Social Insurance (GOSI) and its investment arm Hassana Investment Company, announced the closing of definitive agreements signed on 4 March on Tuesday, in relation to the formation of a joint venture - NMC KSA - in the healthcare sector of Saudi Arabia.

The FTSE 250 company said NMC KSA was being formed by GOSI's contribution of its 38.88% stake in the Tadawul-listed National Medical Care Company (CARE) at a price of SAR 54 per share, and NMC's contribution of its five assets in Saudi Arabia, and an additional $66m cash injection at closing.

It said the cash injection was being utilised by the joint venture to acquire an additional 10.3% stake in CARE through privately-negotiated deals, at a weighted average price of SAR 52.6 per share.

In total, NMC KSA now owns a 49.2% stake in CARE.

Following the closing of the transaction, NMC Healthcare owns a 53% stake in NMC KSA, while GOSI owns the remaining 47%.

NMC said it would control operations and the board of the joint venture entity.

“Given NMC's majority stake in NMC KSA, along with management control of the company, financial statements of NMC KSA will be fully consolidated,” the board explained in its statement.

“In turn, NMC KSA will recognise income from CARE as share of profit from an associate.”

The underlying guidance for 2019 had been upgraded to reflect the impact of the joint venture, as well as consolidation of Boston IVF, the NMC Healthcare directors added.