Dr. Soliman Abdul Kader Fakeeh Hospital, a prominent Saudi hospital group, along with its shareholders, has revealed intentions to sell a 21.5% stake in its forthcoming initial public offering (IPO) in Riyadh, as the market for listings in the kingdom gains momentum following a brief pause.
In this IPO, the company plans to sell 30 million new shares, while the founding family will offer an additional 19.8 million shares, as outlined in a statement released on Wednesday. To facilitate this process, Fakeeh Care Group has enlisted the services of HSBC Holdings Plc as the sole financial adviser and joint bookrunner, alongside anb capital and EFG Hermes. Moelis & Co.
has been appointed to advise the selling shareholders. This announcement from Fakeeh Care Group follows closely on the heels of water treatment firm Miahona Company, which also disclosed its plans for an IPO, coming just a month after flour milling company Modern Mills Co. completed a successful $314 million share sale.
Despite recent geopolitical tensions in the Middle East, particularly between Israel and Iran, the impact on the IPO market in the Persian Gulf region has been relatively subdued. For instance, in Dubai, the IPO of upscale supermarket chain Spinneys 1961 Holding plc was swiftly covered within minutes of its launch.
The company intends to commence accepting institutional investor orders from May 2 to May 8, as detailed in its prospectus, with retail investors having the opportunity to place bids from May 21 to May 22. The proceeds from the sale of new shares will be allocated towards financing the company’s growth strategy.
Dr. Mazen Soliman Fakeeh, President of Fakeeh Care Group, expressed confidence in the timing and prospects of the healthcare industry in Saudi Arabia, especially in light of initiatives such as Vision 2030 and the broader plans for privatization, corporatization, and expansion of public and private insurance under Crown Prince Mohammed Bin Salman’s ambitious economic transformation plan.
Established in 1978 in Jeddah, Fakeeh Care Group has since expanded its footprint to encompass 835 beds across four hospitals and five medical centers, according to the statement. The group reported revenues of 2.3 billion riyals ($613 million) in 2023, marking an increase from 1.7 billion riyals in 2020, with a profit of 232 million riyals for the same period.
Looking ahead, the company aims to further expand its presence, targeting a total of seven hospitals with 1,675 beds and nine medical centers by 2028. This expansion strategy is aligned with projections for Saudi Arabia’s population, which is expected to grow and age significantly, reaching around 40 million by 2030.
Historically, Saudi IPOs, like those across the Gulf region, have enjoyed strong share price performance, largely driven by robust demand from both local and regional investors.
Notably, data compiled by Bloomberg over the past year indicates that only one IPO in the kingdom, raising at least $50 million, has shown negative returns—highlighting the generally positive sentiment surrounding such offerings.
