KENYA – The Evercare Health Fund has sold its 54.9 per cent stake in Metropolitan Hospital Holdings to co-investor, The Metro Group, which currently holds a 41.8 per cent stake in the company.
Metropolitan Hospital Holdings Limited (MHHL), is a holding company that owns Metropolitan Hospital and Ladnan Hospital.
The deal, valued at KSh1 billion (US$8.1 million), returns ownership of Metropolitan Hospital Holdings to its original founders, who established it in 1994.
Regulatory filings before the Competition Authority of Kenya (CAK) indicate that the combined turnover of the two hospitals last year was above KSh1 billion (US$ US$8.1m), highlighting the attractiveness of private healthcare investments in the country with rickety public health services.
“The transaction is not expected to raise any public interest concern since the acquirer is simply increasing shareholding in the target. Based on the foregoing, the Authority approved the proposed acquisition of control of Metropolitan Group Holdings by Metro Group PLC unconditionally,” said the CAK.
The group’s two hospitals have 160 beds and more than 350 staff members. The facilities have served roughly 300,000 mostly low- and middle-income patients since Evercare invested.
Metropolitan Hospital’s bed capacity of 134 together with Ladnan’s 42 offers the two facilities 5.8 per cent of Nairobi County’s total private hospital bed capacity of 3,000.
Evercare acquired the stakes in the two hospitals in 2019 from troubled Dubai-based Abraaj Holdings in a deal that saw the US fund hold shares in Nairobi Women’s Hospital and The Avenue Group of Hospitals.
The fund is managed by Texas Pacific Group (TPG), whose investors include the Gates Foundation, TPG Rise Fund, IFC, British development fund BII (formerly CDC), US development fund DFC, Philips, and Medtronic.
It operates medical facilities in emerging markets across South Asia and Africa.
The transaction, once complete, will see the controlling stake in Metropolitan Hospital fall back into the hands of the group that set it up 27 years ago.
Metro Group, which initially traded as Metropolitan Health Services (MHS), established the hospital in Buru Buru Estate in Nairobi in 1995, and later sold some shares in the company to the public, raising the number of shareholders to over 500.
The group, which is chaired by Dr Robin Michira and has Dr Kanyenje Gakombe as chief executive officer, had initially brought in Abraaj Holdings as an external investor in the hospital.
Metro then turned primarily to commercial real estate and financial investments, with an asset base valued at over KSh560 million (US$4.57m). Its property portfolio includes the Metropolitan Hospital building, Metrovillas Estate and Metro Medical Doctors Plaza.
The entry of Evercare into the shareholding of Metropolitan Group Holdings came in 2019 after Abraaj, once the Middle East and North Africa’s biggest buyout fund, collapsed following a row with investors over the use of money in its healthcare fund.