Integrated Diagnostics Holdings (IDH), a healthcare diagnostics service provider with operations in Egypt, Jordan, Sudan, and Nigeria, has signed an agreement to acquire 50 percent indirect stake in Islamabad Diagnostic Centre Limited (IDC) through Base Consultancy FZE LLC UAE. The transaction is for a total consideration of $72.35 million.
Base Consultancy is a SPV that owns 100 percent in IDC.
The 50 percent stake is currently owned by Evercare Group, an integrated healthcare delivery platform investing in emerging markets across Africa and South Asia, including India, Pakistan, Bangladesh, Kenya, and Nigeria. It is managed by TPG and backed by The Rise Fund.
According to a statement by IDH, the transaction is subject to the satisfaction of a number of key conditions precedent (CPs) including, but not limited to, the receipt of regulatory approval from the Competition Commission of Pakistan (CCP). It will see IDH acquire a stake in one of Pakistan’s leading diagnostic providers and partner with the founder Dr. Rizwan Uppal.
The acquisition will see IDH expand its presence into a highly attractive market in South Asia with a favourable demographic profile, and gain a stake in one of Pakistan’s largest, most respected, and fastest growing integrated diagnostics firms.
IDC will be fully consolidated on IDH’s accounts following the completion of the transaction and transfer of funds to Evercare.
The acquisition is directly in line with IDH’s geographic expansion strategy to penetrate new, fast-growing emerging markets characterised by favourable demographics and an underpenetrated diagnostics sector. The transaction is expected to close in the first half of 2022.
Founded in 2005, IDC is one of Pakistan’s largest integrated diagnostics providers, currently operating a network of more than 80 centres across approximately 30 cities throughout Pakistan as of June 2021.
The company served nearly two million patients and performed around three million tests during the financial year 2021. IDC boasts a market leading position in the country, having effectively worked together on a number pathology and imaging PPPs, and most recently having played a frontline role in COVID-19 diagnostic testing.
Dr. Rizwan Uppal will continue to serve as chairman and chief executive of IDC post-acquisition, leveraging his extensive experience to guide the company as it continues to grow in the coming years.
As part of the transaction, the current Evercare Board representatives; Jide Olanrewaju, Mehmet Ilkin, and Mujtaba Hussain will step down and be replaced by new directors from IDH, with the latter holding four of the seven seats, allowing for IDC’s figures to be consolidated on IDH’s accounts.
Existing Directors, Dr. Rehan Uppal and Dr. Imran Uppal, will continue to serve on the Board alongside Dr. Rizwan Uppal.
Hend El-Sherbini, CEO of Integrated Diagnostics Holdings
“We are very excited about the opportunity to add Pakistan as our fifth geography, one of South Asia’s most attractive markets.” IDH chief executive Dr. Hend El Sherbini, said.
“Pakistan’s young population and lagging investment in healthcare provide for significant future potential. IDC ticks all the boxes of our investment criteria and I am delighted to be partnering with Dr. Rizwan Uppal, who over the last two decades has built a remarkably successful business that places service quality and operational excellence at the core of its offering.
“IDC is an ideal partner for IDH, with the combination of our two companies set to generate remarkable value and future growth opportunities for both parties.”
Meanwhile, IDC’s Dr. Rizwan Uppal, said: “I am delighted to welcome and have the opportunity to partner with a mission-aligned regional champion like IDH to serve more patients, create more employment opportunities across our centres, and usher in a new phase of growth.”
“The synergies between IDH and IDC will ultimately raise the bar for diagnostic healthcare standards and allow us to capitalise on the important growth opportunity offered by the Pakistani market.”
Matthew Hobart, chairman of Evercare and co-managing partner of TPG Growth and leader of healthcare investing for the Rise Fund, said: “Our partnership with Dr. Rizwan Uppal has produced a new standard for diagnostic services in emerging markets.”
“With state-of-the-art equipment, high standards, and quality operations, we have met the healthcare needs of millions of patients, particularly those from low-income populations across Pakistan.”
Advisors
Renaissance Capital acted as the exclusive financial advisor to IDH for the transaction and in connection with the financing. White & Case LLP was the international legal counsel, with Chima & Ibrahim Advocates/Corporate Counsel acting as local legal counsel, and Ernst & Young Global Limited advising on matters pertaining to financial and tax due diligence.
EFG Hermes acted as the exclusive financial advisor to TPG, with Debevoise & Plimpton LLP being the legal counsel and RIAA Barker Gillette as legal counsel to IDC.
