BR Shetty


NMC Health plc (LSE:NMC) (‘NMC’ or the ‘Company’), the leading integrated private healthcare provider operating across the United Arab Emirates, is pleased to announce that it has entered into an agreement to acquire 86.4% of issued share capital of Clinica Eugin (‘Eugin’), a leading global fertility treatment provider based in Barcelona, Spain, for an Enterprise Value of €143m. Eugin is one of the largest fertility clinics in Europe and the established leader in cross-border fertility treatment with patients from the largest Western European countries, as well as the MENA region.  The shares are to be acquired from ProA Capital, Eugin’s founders and members of the Eugin management team.

The acquisition of Eugin allows NMC to achieve several key elements of its recently updated Group Strategy and is supported by a strong strategic rationale:

– Eugin is a leading IVF centre of excellence with world-leading technology and expertise as well as strong brand recognition

– Brings leading global expertise and technologies in fertility services to NMC’s network in the UAE and strongly complements existing NMC women’s health services

– Accelerates the development of NMC into a centre of clinical excellence for women’s health and will allow NMC to establish a foothold in the UAE medical tourism market

– Significant potential for revenue synergies from growing Eugin’s franchise in the UAE and the broader GCC/MENA region

– Transaction expected to be significantly accretive in Year 1 with positive effect on margins and attractive ROIC

– Eugin’s strong and experienced management team have agreed to remain at the Company, limiting potential integration risk

Furthermore, in line with NMC’s Group Strategy, the Company is also in discussion with multiple parties regarding potential acquisition opportunities in the UAE and GCC region, which would allow NMC to increase its scale across the region as well as further maximise operational synergies. These discussions remain at a preliminary stage and there is no certainty that any of these discussions will lead to additional announced transactions.

Dr. B.R. Shetty, Chief Executive Officer, commented:

The acquisition of Eugin represents a unique juncture in the history of NMC, combining the leading UAE hospital franchise with a leading global fertility franchise. This transaction offers NMC the opportunity to become the leading integrated women’s health provider from fertility through obstetrics and paediatrics in the UAE, and also establishes a foothold for the Company in the growing medical tourism market. The acquisition is expected to be accretive within the first year, and further progresses NMC’s strategy of creating centres of excellence across a number of clinical specialties“.

Market Opportunity in the UAE fertility sector

Infertility is a growing medical issue within the UAE and, according to Frost & Sullivan (‘F&S’), it is estimated that the total fertility rate (number of children per woman) in the country has declined from 2.7 in the year 2000 to 1.7 in 2010, with approximately one in six couples experiencing fertility problems. Furthermore, there is an acute shortage of world class fertility treatment facilities in the country with F&S estimating a supply/demand shortfall of 8,500 IVF cycles in 2013, which represented over 50% of the total demand for IVF treatment in that year.

The infertility market in the UAE is also expected to be driven by the growing medical tourism sector in Dubai. Dubai Health Authority has announced plans to attract 500,000 medical tourists by 2020, generating over $700m in revenues. As of 2014, infertility procedures have also been identified by Dubai Health Care City’s (DHCC) recent survey as the leading treatment sought by medical tourists visiting the Emirate.

Information on Clinica Eugin

Based in Barcelona and founded in 1999, Eugin is amongst the largest European providers of fertility treatments, in terms of the number of cycles performed annually, and has the largest egg bank in Europe providing c.10% of donor IVF treatments in Europe.  The Company is also the leader in cross-border fertility treatments in Europe. In 2014, the clinic treated more than 5,000 patients and carried out over 8,000 cycles. The clinic offers a full range of fertility treatments including intra-uterine insemination (IUI), in-vitro fertilisation (IVF), intra-cytoplasmic sperm injection (ICSI), fertility preservation and genetic screening.

Over 95% of Eugin’s patients are referred from outside Spain with France (55%), Italy (17%), Switzerland (4%), MENA (3%) and the UK (2%) representing the main countries of origin for the patients.  Almost all of Eugin’s revenues are derived from privately insured or cash pay patients.

Eugin has been majority-owned by ProA Capital since 2010. Eugin’s current senior management, Andres Rebage (General Operational Manager) and Dr. Valerie Vernaeve (General Medical Manager), have been with  Eugin for several years and have agreed to continue to manage, and retain an investment, in the business.

For the twelve months ended 31 December 2014, Eugin reported revenues of €34.3m, EBITDA of €14.0m and EBITDA margins of 41.0%. As of 31 December 2014, Eugin had gross assets of €59.0m and approximately 230 employees.