Saudi retail investors will start today, Feb. 26, subscribing to around 5.25 million shares of Dr. Sulaiman Al Habib Medical Group (HMG) shares at SAR 50 each, after completing the book-building process.

 

The retail offering will run through Tuesday, March 3.

 

Institutional investors have recently subscribed to 52.5 million shares, or 100% of offered shares.

 

Read: Sulaiman Al Habib Group prices IPO at SAR 50 per share

 

The Capital Market Authority (CMA) approved in September 2019 the medical group’s request to float 52.5 million shares, or 15% of capital. A total of 90% of the offering size was allocated for institutional investors.

 

Sulaiman Al Habib’s IPO is the first share sale on Tadawul this year, and also the first in the healthcare sector since March 2016, when Middle East Healthcare Co., the operator of Saudi German Hospital chain, launched its IPO.

 

Last year, the Saudi market saw 5 IPOs by Saudi Aramco, Maharah Human Resources Co., Arabian Centres Co., Ataa Educational Co., and Al-Moammar Information Systems Co. (MIS).

 

Key Information:

 

The private medical group was established in 1993 as a sole proprietorship with SAR 100,000 capital in Riyadh. In 2007, it was converted into a limited liability company, ahead of converting into a closed joint stock company in 2013.

 

The company hiked its capital 4 times since inception. The first was in 2007 to SAR 500,000. Capital was again raised in 2013 to SAR 2 million, then to SAR 2.8 billion in early 2015 and in August 2015 to the current capital of SAR 3.5 billion, divided into 350 million ordinary shares at SAR 10 par value.

 

The group secured Islamic bank facilities, approved by Sharia committees in those banks.

 

Activities:

 

The group’s principal activities are the establishment and management of health and pharmaceutical facilities as well as HMG solutions, which includes home healthcare, medical laboratories, information technology and maintenance of facilities.

 

HMG also operates University Medical Center-King Abdullah Medical City Bahrain, along with intensive care units in 6 Ministry of Health facilities in 5 cities across the Kingdom.

 

In the pharmaceutical business, the group operates and manages Middle East Pharmacies Company (MEP) and Afia Pharmacies Co.

 

In Dubai, HMG operates its pharmaceutical business under the Pharmachoice brand.

 

Dr. Sulaiman al Habib Group’s Activities

Existing Healthcare establishments

7 healthcare establishments including Olaya Medical Complex and Dubai Hospital as well as Al Qassim, Al Swaidi, Al Khobar, West Al Takhassosi  and Al Rayan Hospitals.

Healthcare establishments under construction

3 hospitals in Northern Riyadh, South Western Jeddah and Northern Jeddah

Managed healthcare establishments

The University Medical Center of King Abdullah Medical City in Bahrain and the care departments in 6 facilities of the Ministry of Health in five cities

Pharmaceutical establishments

Middle East Pharmacies, Al Afia Pharmaceutical & Medical Equipment Co. and Pharma Choice Pharmacies in Dubai

Solutions segment

Providing other health services and support services through operating and managing

Medical diagnostic laboratories (MD LAB) and Home Healthcare in addition to providing utilities maintenance services through its affiliate SIRCO Services.

Providing IT services though its affiliate Cloud Solutions Which provides modern technology systems to serve the auditors, improve the patient experience, and increase operational efficiency.

 

The total number of the group’s beds stood at 1,913 by the end of 2019, without factoring the planned expansion that will add 1,180 beds.

 

This move will bring up the total number of beds to over 3,000 in the coming years.  

 

Al Habib Healthcare Facilities

Healthcare facility

Land area (‘000 m²)

Building Area

 (‘000 m²)

Property ownership

No. of clinics

No. of employees

No. of beds

Olaya Medical Complex

9.71

69.10

Rented/owned*

203

1,844

260

Al Qassim Hospital

6.11

31.00

Land is rented from municipality

85

926

172

Al Rayan Hospital

32.08

144.29

owned

235

2,075

349

Western Al Takhassosi Hospital

21.21

74.95

owned

179

1,821

218

Al Swaidi Hospital

19.37

116.00

owned

243

1,461

305

Al Khobar Hospital**

30.56

211.32

owned

307

23**

458

Dubai Hospital

8.61

42.92

owned

119

977

151

Total

127.66

689.58

--

1,371

9,127

1,913

*the complex consists of 7 buildings of which 5 are owned and 2 are rented.

** Al Khobar Hospital started operations in Q2 2019. The company is currently hiring and relocating healthcare practitioners and employees.

 

Future Projects:

 

The group plans to set up the following 3 new health facilities in the Kingdom:

 

(1) North Riyadh Hospital;

(2) South West Jeddah Hospital; and

(3) North Jeddah Hospital.

 

Company’s Profile

Company

Sulaiman Al Habib Medical Group Co. (HMG)

Market

TASI

Main activities

Managing and operating hospitals, specialized clinics, medical centers and one-day surgery centers in addition to some supporting activities

Status

Active

Capital

SAR 3.5 bln

 

IPO Summary

Issue percentage (%)

15%

Number of shares offered for ratail investors

5.250 mln shares represent 10% of total offering shares

IPO Price

SAR 50/share

Retail investors IPO size

SAR 262.5 mln

Qualified investors

Saudi and GCC retail investors

IPO minimum for retail investors

10 shares

IPO maximum for retail investors

500,000 shares

IPO period for retail investors

7 days (from Wednesday, Feb. 26 until Tuesday, March 3, 2020)

Allotment and surplus repayment

March 9, 2020

 

Additional Information

Financial advisor, underwriter

Riyad Capital, Jadwa Investment

Institutions book runner

Jadwa Investment- Riyad Capital- EFG Hermes Saudi Arabia

Lead manager

Riyad Capital

Receiving banks

Riyad, NCB, Al Rajhi , SABB and Samba

 

Sulaiman Abdulaziz Sulaiman Al-Habib is the top shareholder in the group. His stake after the IPO will reach 40.03%.

 

Major Shareholders

Shareholder

Number of shares after IPO

(mln shares)

Stake

%

Sulaiman bin Abdulaziz S. Al Habib

140.11

40.03 %

Thabat Ltd.*

12.85

3.67 %

Mohammed bin Abdulaziz  Al Habib & Sons Holding

118.14

33.75 %

Jawarat Al Bahr **

17.43

4.98 %

Hisham Sulaiman bin Abdulaziz S. Al Habib

7.00

2.00 %

Mohamed Sulaiman bin Abdulaziz S. Al Habib

1.98

0.57 %

Public

52.50

15.00 %

Total

350.00

100 %

*Fully owned by Sulaiman Abdulaziz al Habib.

** Fully owned by Mohammed bin Abdulaziz  Al Habib & Sons Holding

 

The following table illustrates the IPOs witnessed by the Saudi market in the last 5 years.

 

Recent IPOs

Company

IPO price

(SAR)

Number of shares for retail investors

(mln share)

Coverage ratio %

(retail)

2019

Aramco

32

1,000

154 %

Ataa

29

1.20

426 %

Maharah

69

1.13

230 %

Arabian Centres

26

9.50

60 %

Al Moammar

45

0.71

149 %

2018

National Learning

19

1.30

327 %

Leejam

52

1.57

245 %

2017

Al Waha

51

0.9

263 %

2016

L’Azurde

37

3.87

293 %

Al Yamamah Steel

36

4.57

479 %

Saudi German Hospital

64

8.28

274 %

2015

Alandalus

18

8.40

464 %

SGS

50

22.60

339 %

SACO

70

2.88

620 %

MEPCO

30

6.00

473 %

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