Nairobi Women’s equity deal values hospital at Sh1.8bn
Medical Services director Francis Kimani (in front) and Nairobi Women’s Hospital CEO Sam Thenya during the official opening of the hospital’s fourth branch in Kitengela, near Nairobi. Photo/William Oeri
What you need to know:
Abraaj Group and Swedfund, a State-owned firm, have bought a stake worth Sh564 million ($6.5 million) in the health facility, effectively giving them a combined shareholding of 49 per cent
The hospital’s founder, Sam Nthenya, the majority owner has 51 per cent of the shares
Swedfund invested $4 million for a 19.2 per cent, while Abraaj Capital’s $2.5 million was valued at 12 per cent stake
Abraaj Group, through its Africa Health Fund, had already bought a $2.6 million stake in 2010, which makes it the second biggest owner of the hospital
A Dubai-based private equity fund and a Swedish venture capital firm have injected half a billion shillings into Nairobi Women’s Hospital in a deal that values the specialist health provider at about Sh1.8 billion.
Abraaj Group and Swedfund, a State-owned firm, have bought a stake worth Sh564 million ($6.5 million) in the health facility, effectively giving them a combined shareholding of 49 per cent and leaving the hospital’s founder, Sam Nthenya, the majority owner with 51 per cent shares.
Swedfund invested $4 million for a 19.2 per cent, while Abraaj Capital’s $2.5 million was valued at 12 per cent stake. Abraaj Group, through its Africa Health Fund, had already bought a $2.6 million stake in 2010, which makes it the second biggest owner of the hospital.
“Overall we will have 19.2 per cent, Sam Nthenya 51 per cent and Africa Health Fund the balance (29.8 per cent),” said Swedfund regional head Jonas Armtoft in a telephone interview.
Mr Nthenya is also the Nairobi Women’s Hospital chief executive.
The money will be used for expansion.
“This investment will enable the Nairobi Women’s Hospital to complete the financing of its modernisation and expansion plan in East Africa. This will in turn increase the range of treatments and services offered to patients in the region,” said Abraaj Group in a statement.
Expansion into neighbouring countries is expected to happen over the next two years.
The hospital has branches in Hurlingham, Adams Arcade, Ongata Rongai, Kitengela, Eastleigh, Nakuru and Kiambu.
“The Nairobi Women’s Hospital Mombasa and Kisumu branches are work in progress and are part of the grand plan to expand further in the country and the Eastern African region by 2016 and subsequently into the rest of Africa,” said the statement.
Healthcare, similar to education enterprises, have been attracting private investors who are filling a gap created due to failure of the state to deliver quality healthcare over the years.
A recent Deloitte report on private equity funds showed that Kenya’s middle class is willing to pay for healthcare and education as long as quality is guaranteed.
Investors in the health sector said women’s healthcare is a preferred choice due to physiological needs that require more attention and generally women tend to better take care of themselves.
Twin factors
Nicholas Sowden, the co-founder of Penda Health, a clinic franchise that caters for women’s health, said that these twin factors assure a service provider with a reliable stream of patients.
“Many women seek healthcare when they are sick or unwell and sometime even for preventative healthcare like cancer screenings or wellness checks. Many men, on the other hand, refuse to go to a hospital, even when they are very sick,” Mr Sowden told the Business Daily.
Women also tend to influence the choice of other family members.
“Women make the decision about where to seek healthcare for the whole family, including the children and men. If you convince a woman that your hospital is the best, she brings her whole family to see you,” he added.
A recent joint study by the International Finance Corporation (IFC) and global consultancy McKinsey said that healthcare in sub-Sahara Africa is a billion dollar business that would grow rapidly in the next three years.
“This study estimates that the market for healthcare will more than double by 2016, going up to $35 billion,” said the report.
The IFC is an active investor in Kenya’s healthcare industry having a 20 per cent stake in AAR Group, which it bought for Sh348 million earlier in the year.Swedfund is also an investor in AAR Group with a 40 per cent stake.
