Gulf Capital enters Jordanian healthcare market

The Abu Dhabi-based firm appears to be unaffected by the Arab spring and the global economic climate as its 2010 fund is 50% deployed after two years.

Gulf Capital has tapped into the Jordan healthcare market as one of its portfolio companies, Techno Group Investment Holdings, acquired a majority stake in Med Ray, a diagnostic imaging company, it said in a statement.

The transaction value was undisclosed but Gulf Capital’s chief executive, Karim El Solh, told Private Equity International it was a small transaction that Techno Group could finance on its own. “They did not need additional equity,” he said.  

Gulf Capital already owns an 80 percent stake in Technoscan, the largest diagnostic imaging centres company with centres across the Arab region. Following this add-on acquisition, Techno Group will be the largest regional chain of diagnostic imaging centres in the area.

The firm is keen on investing in healthcare as it is a defensive sector, El Solh said. “It keeps on growing on the back of a booming population, strong government funding and the growing insurance market,” he added. The Abu Dhabi-based firm seeks to further expand its presence in the region. Tunisia and Morocco are next on list. 

Despite what happened in the Arab spring and the global crisis, our centres are all growing very nicely

Karim El Solh

In addition to acquisitions, Technoscan is growing organically, El Solh said. “In Egypt, we grew from 11 to 24 centres. The EBITDA of Technoscan in Egypt grew 84 percent this year. Despite what happened in the Arab spring and the global crisis, our centres are all growing very nicely. That shows the performance is not correlated to the global economy climate,” El Solh added.

Using local expertise and gaining a majority stake are the two main ingredients for success, El Solh said. “The best way is to partner with a local team with a track-record and knowledge of the local market, which is what we have done in Jordan. We are also quite focused in acquiring majority controlled stakes. We like to be able to influence the businesses and growth them and restructure them if required. And when the exits come it’s easier to sell a majority stake than a minority position,” he added. 

This year Gulf Capital has made two acquisitions. It bought an 80 percent stake in contract staffing company Reach Group and an 83 percent stake in Sakr Energy Solutions, a temporary power generation company. The investments have been made from the firm’s $533 million GC Equity Fund II. The 2010 fund, which makes investments between $30 million and $100 million dollars, is currently 50 percent deployed. With a few more add-on acquisitions in the pipeline, Gulf Capital hopes “to reach the 75 percent mark by the end of this year,” El Solh said.

The firm declined to comment on fundraising. A source familiar with the situation said “given the increasing investment pace, at some point [the firm] will be coming back to the market with an additional fund.”