Abraaj Capital, one of the leading investment firms specialising in private equity investment in the Middle East, North Africa and South Asia (MENASA) region, announced today that it has acquired a 76.9 per cent stake in Al Borg Laboratory, the largest private laboratory in the Middle East, through a public tender offer. Abraaj Capital’s investment will support the ongoing expansion of Al Borg Laboratory in Egypt and across the wider MENASA region.
Al Borg Laboratory, which was established in Egypt in 1991, has served over 10 million patients and conducted more than 29 million tests since it was founded. Listed on the Cairo and Alexandria Stock Exchange, the company is a leading provider of primary medical services through its 60 laboratories in Egypt, in addition to a minority stake in Mokhtabar Al Borg Saudi Arabia – with 14 branches in Saudi Arabia, four in the UAE and a recently opened laboratory in Qatar.
The company, which provides a highly diversified range of services and currently carries out more than 5 million tests per year, is the market leader in Egypt. Al Borg employs over 1,000 professionals, including specialised laboratory physicians, experienced technologists and managerial staff.
In line with international best practice, Al Borg uses only US Food and Drug Administration (FDA) approved equipment and reagents, supplied by global manufacturers such as Abbot, Roche, Bayer and Beckman Coulter. Al Borg also holds a range of international quality certifications, including ISO 9001-200, CAP-EXCELL and RIQAS-Randox. In addition, Al Borg has applied for ISO 15189 accreditation, which will be attained by 2009.
The investment by Abraaj Capital in Al Borg Laboratory will support the development of the primary medical services sector in Egypt and facilitate the long-term expansion of Al Borg’s services in the MENASA region.
The number of tests per capita in the MENASA region is currently far below international levels: in Egypt, the per capita average is 2.5 laboratory tests per year, and in Saudi Arabia the per capita average is 6 laboratory tests per year. By comparison, the per capita average is 16 tests per year in Europe and 22 tests per year in the United States.
As the MENASA region continues to experience strong economic growth, greater penetration of health insurance, and increased outsourcing by primary and secondary healthcare providers, the level of laboratory testing is expected to increase significantly.
The region is characterised by a young, fast-growing population; this trend is particularly evident in Egypt, Al Borg’s home market, and Saudi Arabia, where the company has its second-largest presence. The region, and especially the Gulf states, is also home to an increasingly significant expatriate population and a growing middle class.
“The expansion opportunities for leading primary healthcare service providers, such as Al Borg Laboratory, will continue to increase, especially as governments in the region incentivise private-sector participation in the sector,” said Mustafa Abdel-Wadood, Chief Executive Officer of Abraaj Investment Management Limited. “In addition, changing socio-demographics means that the need for high-quality, accurate and specialised laboratory testing will prove more vital than ever to minimise the prevalence of health risk factors.
“Thanks to Al Borg’s aggressive expansion of its branch network, ongoing professional training, unmatched technical expertise and efficient, patented Laboratory Information Management Systems (LIMS), the company has long been a market leader in the laboratory services sector in Egypt and the wider region,” Abdel-Wadood added. “This investment, which is in line with Abraaj Capital’s strategy to invest across various segments of the regional healthcare sector, will further enhance the ability of Al Borg to expand its world-class services.”
“Laboratory testing is critical to ensuring timely and accurate treatment, providing physicians with an average 70 per cent of all relevant patient information. The provision of such information depends upon maintaining the latest technology and equipment involved in laboratory diagnoses, as well as the range of testing services, which are significantly enhanced every 3-5 years,” said Dr. Ahmed El Saifi, Chairman and Chief Executive Officer of Al Borg Laboratory. “Our partnership with Abraaj Capital will provide us with in-depth strategic support and additional resources to expand our presence and services in the MENASA region.”
