Almoosa Health IPO Overview

Almoosa Health Company ("Almoosa Health" or "Almoosa"), a leading healthcare service provider in Saudi Arabia, has announced its intention to proceed with an Initial Public Offering (IPO) and list its ordinary shares on the Main Market of the Saudi Exchange (Tadawul).

1. Key Offering Details

• Capital Market Authority (CMA) Approval:
  Approved on September 30, 2024, for the registration and offering of 13,291,074 Ordinary Shares.
• Offer Composition:
  • New Shares: 9,303,580 shares, representing 21% of the total share capital post-offering.
  • Sale Shares: 3,987,494 shares sold by Selling Shareholders, representing 9% of the total share capital post-offering.
  • Combined, these shares represent 30% of the Company's total share capital after the capital increase.
• Cornerstone Investors:
  • The Company for Cooperative Insurance (Tawuniya) will subscribe to 4.1% of the post-offering capital.
  • Alfozan Holding Company will subscribe to 2.5% of the post-offering capital.

2. Allocation and Pricing

• Subscription Eligibility:
  Open to individual and institutional investors, including institutional investors outside the United States, under Regulation S of the US Securities Act of 1933.
• Employee Investment Fund:
  Up to 131,250 Ordinary Shares (0.3% of the post-increase capital) will be purchased by the fund on behalf of authorized employees at the final offering price.

3. Use of Proceeds

• Financing the Company’s growth strategy.
• Repaying part of its outstanding debt.

The offering price will be determined through a book-building process. Almoosa Health’s IPO marks a strategic step to support its expansion and operational objectives.

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IPO Summary

Key Investment Highlights and Strategic Plans

1. Macroeconomic Support for Saudi Healthcare Sector Growth

• Saudi Arabia’s long-term economic outlook is strong, underpinned by Vision 2030 and strategic economic diversification initiatives.
• The Saudi healthcare market is projected to grow at a 6.5% Compound Annual Growth Rate (CAGR) from 2023 to 2030, reaching SAR 360 billion. Private sector contribution is expected to rise from 18% in 2023 to 25% by 2030.
• The 60+ age group in Saudi Arabia is expected to grow at a CAGR of 10% between 2022 and 2030, significantly outpacing overall population growth.
• The Eastern Province, where Almoosa Health operates, is poised to see increased demand for healthcare due to its role as a hub for energy, petrochemicals, and mining.

2. Comprehensive Healthcare Services

• Almoosa Health is a leading integrated healthcare provider offering services across Primary, Acute Care, Rehabilitation, and Extended Care.
• Plans to open five standalone primary healthcare centres by 2027, offering nine specializations.
• Almoosa plans to expand its multispecialty infrastructure by adding two new hospitals: one in Al Hofuf (300 beds) by 2027 and one in Khobar (400 beds) by 2028. The Eastern Province currently has 2.5 beds per 1,000 people, below the OECD average of 3.2.

3. Innovative and Integrated Care Model

• Almoosa employs a patient-centric, efficient, and scalable ‘hub and spoke’ model that integrates primary, acute, and rehabilitation care.
• The Company utilizes modern technologies and innovative care management strategies to enhance patient satisfaction and outcomes.
• Patients benefit from a seamless healthcare experience across the Almoosa ecosystem, including home healthcare and telemedicine.

4. State-of-the-Art Healthcare Technology

• Almoosa Specialist Hospital in Al-Ahsa uses advanced technology to improve patient engagement and decision-making.
• The Company employs innovative health IT solutions such as Health Information Systems (HIS) and Yasassii, which streamline patient information management.
• Achieved HIMSS Stage 7 Accreditation, reflecting advanced technology adoption.
• Advanced Medical Equipment includes:
  • Tesla 3 MRI for high-resolution imaging.
  • Hybrid Operating Rooms for complex surgeries.
  • Automated Systems in labs and pharmacies to enhance workflow efficiency.

5. Strong Financial Performance and Growth Plans

• Almoosa’s revenue grew at a CAGR of 18.1% from 2021 to 2023, reaching SAR 979 million in 2023 and SAR 870 million for 9M 2024.
• EBITDA growth outpaced revenue, expanding at a CAGR of 37%, driven by workforce optimization and expansion of clinical services.
• EBITDA margin improved from 15.8% in 2022 to 20.0% in 2023.
• Net income grew at a CAGR of 25.4% from 2021 to 2023, reaching SAR 98.1 million in 2023.

6. Strategic Expansion Plans

• Almoosa plans to add 700 beds by 2028, reaching a total of 1,430 beds across four hospitals and five primary care centres.
• New hospitals include Al Moosa Specialist Hospital in Al Hofuf (300 beds, 200 clinics) by 2027 and Al Moosa Specialist Hospital in Al Khobar (400 beds, 300 clinics) by 2028.
• Five primary care centres will be established across Al Ahsa, Al Khobar, and Dammam between 2025 and 2027.
• Land acquisition and excavation have already begun for the new hospitals in Al Khobar and Al Hofuf.

7. Founder-Led Business with Strong Leadership

• Almoosa Health is led by CEO Mr. Malik Almoosa and supported by a management team with an average industry experience of 25 years.
• The Board, headed by Founder and Chairman Mr. Abdulaziz Almoosa, has a strong track record of clinical excellence and a deep understanding of the Saudi healthcare sector.

8. Capital Structure and Dividend Policy

• Post-IPO, Almoosa’s share capital will total SAR 443,035,800, divided into 44,303,580 ordinary shares.
• The Company plans to distribute annual dividends, subject to approval by shareholders and based on various factors, including profits, cash flows, and market conditions.
• Recent dividends included SAR 48 million for FY 2021, SAR 94 million for FY 2023, and SAR 27 million for Q1 2024. No dividends were paid for FY 2022.

Investor Groups

Tranche (A): Participating Parties
This tranche is reserved for institutional investors and foreign entities eligible to participate in the book-building process. It includes:

• Investment funds
• Qualified foreign companies and institutions
• GCC corporate investors
• Foreign investors under swap agreements
• If Individual Subscribers (Tranche B) subscribe to all their allocated shares, the number of Offer Shares allocated to Participating Parties may be reduced to a minimum of 10,632,860 Offer Shares (80% of the total Offer Shares).
• The final allocation to Participating Parties will be determined by the Financial Advisor, in coordination with the Company, using a discretionary allocation mechanism.

Tranche (B): Individual Subscribers
This tranche is available to:

• Saudi nationals
• Non-Saudi residents in Saudi Arabia
• GCC nationals with a bank account at one of the Receiving Agents, eligible to open an investment account with a Capital Market Institution
• If Individual Subscribers do not fully subscribe to their allocated shares, the Financial Advisor, in coordination with the Company, may adjust the allocation to ensure that the total Offer Shares are subscribed to in proportion to the subscriptions received.

Substantial Shareholders of the Company Pre- and Post Offering

Source: The Company

Expected Offering Timetable

Note: The schedule and dates above are approximate. Actual dates shall be announced on the websites of Tadawul (www.saudiexchange.sa), the Company (www.almoosahealthgroup.org) and the Financial Advisor, Saudi Fransi Capital (www.bsfcapital.sa).

Read the full Prospectus

Introducing the new IPO feature on Sahm platform: A step-by-step guide to subscribing to the IPO

Further updates regarding this IPO will be provided as more information becomes available.

- Reporting by Zaid, Sahm News team