Equity & IPO: Deal of the Year
In 2016, Middle East Healthcare Company (MEAHCO) successfully closed its US$480 million (SAR1.8 billion) IPO. MEAHCO is one of the leading healthcare service providers in Saudi Arabia which operates under the brand name ‘Saudi German Hospital’. The IPO of MEAHCO was the first in 2016 in Saudi Arabia and is considered the largest IPO to take place in the Kingdom by a healthcare service provider to date. The IPO was an important milestone in MEAHCO’s successful journey and is indicative of the investment in Saudi Arabia’s healthcare industry.
The IPO secured two awards at IFN’s Deal of the Year 2016 awards in the category of Equity & IPO. The Law Office of Salman Al-Sudairi, in association with Latham & Watkins, acted as the issuer’s counsel in relation to the IPO and guided MEAHCO throughout the IPO journey to its successful completion.
The IPO received an astounding reaction from the market, with the bookbuilding process generating an orderbook of around SAR10.5 billion (US$2.8 billion), resulting in 593.7% of the total offered shares subscribed by institutional investors. The retail subscription by individual investors was 274% oversubscribed.
Summary of terms & conditions |
|
Size: |
SAR1.8 billion (US$479.34 million) |
Arranger & bookrunner: |
(Samba) Capital & Investment Management Company |
Lawyers: |
The Law Office of Salman Al-Sudairi in association with Latham & Watkins advised the issuer. Clifford Chance advised the underwriters |
Date: |
3rd March 2016 |
The IPO is unique in many ways. The first IPO of 2016 in Saudi Arabia, also the largest at the time of the issuance, it attracted a substantial number of eligible institutional and retail investors. It is also notable that there are not many IPOs carried out by Saudi-based healthcare companies. Highly reputable stakeholders, such as Bait Al Baterjee, the International Finance Corporation, the IDB and the Arab Fund are among the main key shareholders of MEAHCO at the time of the IPO.
Office Managing Partner Salman Al-Sudairi commented: “We are delighted to have advised MEAHCO and its shareholders on this landmark transaction which is the culmination of a long journey, and we are honored to be a part of this landmark deal from the early stages.”
The healthcare company, which manages four major hospitals in Riyadh, Jeddah, Madinah and Aseer, is in the process of developing two additional hospitals in Dammam and Hail. Overall, the IPO was a milestone for MEAHCO as it contributed to the company’s strategy to create a strong foundation for future growth.
Salman Al-Sudairi, Partner, [email protected]
Sami Al-Louzi, Partner, [email protected]