The Ascent Medical Technology Fund II, LP predicts that its joint venture medical equipment manufacturing unit with Salalah Medical Supplies Manufacturing Co. (SMSMCo), launched earlier this month, could apply for its initial public offering (IPO) within three years.
The US-based [company, which launched the] US $100 million Ascent Medical Technology Fund II, a private equity vehicle to promote the development of the medical technology industry in the Middle East, in 2005, is already confident of success with its Oman operations.
The medical manufacturing unit will begin operations in early 2008, offering medical professionals in the region and abroad the chance to not only purchase medical equipment at a lower cost, but to also develop the equipment of the future.
“We believe that the OEM facility will be able to IPO in the Middle East regional markets within three years of its establishment. We expect returns to be no less than our 60 per cent IRR standards, likely above,” said Peggy Farley, president and CEO of Ascent Capital Management, the advisor to the Fund.
“If our views on innovation coming into the OEM from regional scientists, engineers and physicians are on target, we see the potential IRR as well into the triple digits,” Farley added.
According to Farley, medical technology investments are noted for their outstanding performance and she expects a similar performance from a future IPO.
Ascent medical technology investments have had an average return on investment of 824 per cent year on year, against an average of 100 per cent from traditional equity and capital markets.
“One of the principal reasons for the high returns, beyond selecting outstanding technologies, is a history of successful IPO’s from the US medical technology sector, which connects with a wave of IPO’s currently being experienced in the Middle East,” she said.
The Ascent/SMSMCo medical manufacturing unit will begin operations in early 2008. Initial products will be guide wires and surgical kits, both of which have broad and deep markets globally.
