Care signs agreement to acquire entire share capital of Jiwar Medical at SR 65 mln

National Medical Care has signed an agreement on 22/01/2023 to acquire the entire share capital of Jiwar Medical Services Company for a consideration of SR 65,000,000, subject to customary purchase price adjustments made in light of the completion accounts under the agreement.

The valuation of the Target has been done using different methods such as discounted cash flows, P/E and EBITDA multiples.

The completion of the Transaction is subject to a number of conditions, including without limitation receipt of regulatory approvals (including from the General Authority for Competition).

Parties of the Transaction:

1. National Medical Care Company (as purchaser); and
2. Smartmed Investment Company (as seller)

It was announced that the Target is a 66 bed healthcare company located in close proximity to the Holy Mosque of Makkah and has direct access to Al Haram. The purpose of the Target is to provide urgent medical care services to pilgrims and people visiting the Holy Mosque and working nearby. The Target will serve cash, insurance and other segments.

The Target is yet to commence its operations as such, per the audited financial statements its losses for the years ended 2020 and 2021 amounted to SR 5.12 million and SR 3.17 million respectively.

The Transaction aims to contribute towards achieving Care’s investment strategy to expand in the health services sector and take advantage of the growth opportunities available in the relevant market.

The financial impact will be determined based on the performance of the Target after the Transaction, and it is expected to have a positive financial effect on Care over time.

Care will announce completion of the Transaction or any other material development in due course in accordance with the relevant regulatory requirements, and expected to commence operations in Q2 of 2023.

This comes in subsequent to the announcement made on Tadawul on 31/07/2022 by National Medical Care Company (“Care” or the “Buyer”) on the signing of a non-binding memorandum of understanding with Smartmed Investment Company (the “Seller”) for the purpose of acquiring the entire share capital of Jiwar Medical Services Company (“Target”), Care announces the signing of a share purchase agreement (the “Agreement”) to acquire the entire share capital in the Target (the “Transaction”(.