Why is Abu Dhabi’s PureHealth buying up U.K. hospitals?
The biggest health-care network in the UAE has made two big-ticket acquisitions since forming last year – including a debut in the U.S. and a research partnership with Israel.
Christopher Furlong/ Getty Images
An operating room in Birmingham, England
ABU DHABI, United Arab Emirates – The UAE’s biggest health-care network, PureHealth, has made two big-ticket acquisitions since forming last year, looking outside the region to the U.S. and U.K. for growth, while forging a research relationship with Israel.
Last week, PureHealth bought one of the U.K.’s largest independent hospital operators in a $1.2 billion deal. Circle Health Group operates 53 private hospitals and marks PureHealth’s entrance into the British market. The news came three months after a deal was finalized for a minority stake in U.S.-based Ardent Health Services. The $490 million equity investment made PureHealth the only UAE-based health-care provider to ever directly acquire assets in U.S. hospitals and clinics.
ADQ, PureHealth’s largest shareholder, is one of the Middle East’s largest holding companies with a broad portfolio of large Abu Dhabi firms.
As one of several sovereign wealth funds in the capital emirate it also has a unique mandate: to be the lead investor driving the UAE’s economic transformation from petro-state to a knowledge-based economy. Chaired by Sheikh Tahnoun bin Zayed Al Nahyan, the country’s national security adviser and brother to president of the UAE, Sheikh Mohammed bin Zayed, its portfolio includes holdings in agriculture, energy, financial services, health care and life sciences.
ADQ merged its health-care subsidiaries with Alpha Dhabi’s Pure Health Medical Supplies in January 2022. PureHealth, which had branded itself as a research and clinical hub focused on longevity, was the main provider of the nation’s massive COVID-19 testing effort at the time. ADQ’s agreement consolidated the public health provider SEHA, major health insurer Daman and stem cell research center ADSCC into one group, creating a footprint of more than 25 hospitals, more than 100 clinics and more than 160 laboratories in the UAE. Its shareholders include Alpha Dhabi Holding, AH Capital, Ataa Financial Investments as well as International Holding Co., a company also led by Sheikh Tahnoon.
“Going forward, PureHealth will actively seek expansion opportunities globally to further diversify its portfolio and leverage its success in the UAE,” Mohamed Thani Murshed Al Rumaithi, chairman of Alpha Dhabi Holding, a minority shareholder, said at the time.
Earlier this year, PureHealth also struck a strategic partnership with Israel’s Sheba Medical Center, a globally recognized medical research institution.
The two entities said at the time they will closely collaborate on joint clinical research projects, promote the use of advanced technology in health care, expand genetic research initiatives and boost health tourism in both countries.
The alliance will also focus on education and training. Both parties will jointly organize conferences and events, and create clinical specialization projects and internships.
This expansion strategy follows a wider trend in the Gulf, Bloomberg noted last week, with a glut of deals happening between the Middle East and the West in sectors spanning sport, energy, logistics and yes, health care.
“Corporates in the Middle East, especially in Saudi Arabia and the UAE, are being empowered by their sovereign backers to go out and seek transformative transactions,” Hamza Girach, co-head of Citigroup Inc.’s Middle East and Africa, banking, capital markets and advisory unit, told Bloomberg in an interview. “This is the biggest shift that we are seeing when it comes to dealmaking in the Middle East, which is the emergence of these companies who are seeking overseas growth and keen to expand via acquisitions.”
PureHealth’s deal with Ardent, which was first announced in September 2022, gives PureHealth board observer rights, although not a seat on Ardent’s board of directors. The investment also “does not include plans for either the expansion of Ardent’s physical footprint or collaboration between Ardent and PureHealth in the delivery of care”, according to a statement.
“The conclusion of this transaction marks the beginning of a new phase of growth for PureHealth in which we will build on our global relationships and strengthen our international reputation,” Farhan Malik, managing director and CEO of PureHealth, said at the time.
These global ambitions for UAE health care came after a strong pandemic performance, which to outsiders may have appeared unexpected. Health-care costs were increasing when COVID-19 took hold and the country had a shortage of nurses relative to Western nations, according to analysis by the U.S.-UAE Business Council in 2021. Yet on Bloomberg’s monthly global COVID-19 resilience ranking the UAE regularly sat in the top three, thanks to a high vaccination rate and relatively limited interference to travel and economic activity.
Today, Abu Dhabi has ambitions to capture the world’s first population-wide genetic library and localize pharmaceuticals manufacturing while becoming a destination for clinical trials and research. The genome project is a foundational piece to Abu Dhabi’s ambitious plans for personalized medicine, which also include a connected network of the emirate’s medical records.