Abraaj stages second North Africa healthcare IPO

The firm’s listing of Egypt’s Cleopatra Hospital Company on the Egyptian Exchange follows on the heels of the IPO of Unimed on the Tunis exchange.

The Abraaj Group has launched its second initial public offering (IPO) of a North African healthcare company in a month, listing Cleopatra Hospital Company on the Egyptian Exchange (EGX).

The firm raised EGP 360 million ($40.5 million; €36 million) through the offering. Abraaj retains an 80 percent stake in the company, which it said is the biggest private hospital group in Egypt. The proceeds of the IPO will be used to fuel future growth.

The firm invested in the hospital group in 2014 alongside the European Bank for Reconstruction and Development, Deutsche Investitions-und Entwickungsgesellschaft, and the Société de Promotion et de Participation pour la Coopération Economique. Private Equity International understands that the investment was made through Abraaj Private Equity Fund IV and Abraaj North Africa Fund II (ANAF II).

About two thirds of the order book for the Cleopatra Hospital IPO came from international investors, Abraaj said. The offer to institutions was oversubscribed six times, while the retail tranche was more than 28 times oversubscribed. The IPO was only the second on the EGX this year.

Overall, the exit environment has been very good in North Africa in contrast to the Gulf where there is “limited” exit potential partly because of where the market is in the economic cycle, Abraaj partner and head of MENA Ahmed Badreldin told PEI in May. In North Africa “strategics want to buy, the IPO markets are open, even buying from private equity has started to happen a little bit.”

The Egyptian IPO market is picking up, Cairo-based Duet-CI Capital senior managing director Amr Helal told PEI. “Firms have been able to exit and monetise by IPO-ing, it is becoming a more actionable venue.”

The Cleopatra Hospital listing follows Abraaj’s exit in early May of Tunisian pharmaceutical company Unité de Fabrications de Médicament (Unimed) through an IPO on the Tunis stock exchange. The share sale was the first on the local exchange this year and was oversubscribed by 33 times. Abraaj invested in Unimed in 2011 through its Kantara Fund.

ANAF II, a $375 million vehicle that closed in July last year, was almost fully invested only nine months after it closed, Badreldin said. One of its goals is to build the region’s largest hospital group through its Egyptian/Tunisian healthcare platform North Africa Hospital Holdings.

To read our Middle East Outlook that appears in June’s edition of Private Equity International, click here.