MD Medical Group Acquires Avicenna Medical Center
MD Medical Group Investments Plc ("MD Medical Group", "MDMG" or the "Company" - LSE: MDMG), Russia's leading provider of private women's and children's healthcare, is pleased to announce that it has completed the acquisition of the Avicenna Medical Center ("Avicenna"), the largest private healthcare company in Russia outside of Moscow and St Petersburg.
The deal represents the biggest acquisition of MD Medical Group to date. Avicenna is situated in Novosibirsk, a new region for MDMG with a higher birth rate than the average rate in Russia. Currently, the Avicenna network includes three multi-disciplinary clinics with its own laboratory and a hospital with a maternity ward.
As announced on 20 August 2014, MDMG has acquired 100% of the outstanding share capital of Ivicend Holding Ltd, the previous owner of the Avicenna Medical Center, for a total consideration of USD 45.5 million paid in cash. 5 per cent of the amount payable will be held in escrow until a new hospital, currently under construction (6,096 sq m, 48 beds), is considered operational and adjoined to Avicenna's existing facility. The new hospital, which will be leased by Avicenna, is expected to commence operations in 2016-2017. Thus, the deal also provides growth opportunities for the Company through the addition of a new hospital to its network in the future. The current management team of Avicenna will join MDMG to help facilitate the integration of the clinics and hospital into the MD Medical Group. Consolidation of operating and financial results of Avicenna into MDMG will take effect from 1 October 2014.
Prior to the completion of the acquisition, MD Medical received all required approvals, including approval from the Russian Federal Antimonopoly Service.
Commenting on the acquisition, Chairman of MD Medical Group, Dr Mark Kurtser said:
"We are delighted to complete the acquisition of the Avicenna Medical Center, another key milestone and wholly aligned with our strategy to grow in to new regions and add to our network of state-of-the-art high-quality hospitals across Russia.
"Avicenna is the largest private healthcare company in Russia outside of Moscow and St Petersburg and the team there have built a strong reputation for delivery of high-quality services, and we expect to continue to operate under their well-established Avicenna brand at least for the next two years. We very much look forward to working with the Avicenna team and to developing further the medical services industry in the region. Based on the existing Avicenna gynaecology and IVF departments we will be able to strengthen our core business lines and reinforce our leading position on IVF market in Russia. With the construction of a new hospital and the integration of our MDMG services, we are very confident in the growth potential for MDMG in Novosibirsk."
About the Avicenna Medical Center
The Avicenna Medical Center was established in 1996 and currently comprises three multi-disciplinary medical and diagnostic clinics with its own laboratory and a hospital with a maternity ward. Avicenna offers a broad range of in- and out-patient services including deliveries, IVF, obstetrics and gynecology, pediatrics, cardiology, radiation and ultrasound diagnostic, dentistry and neurosurgery, plastic surgery and urology, traumatology and orthopedics.
As calculated in accordance with unaudited management accounts, Avicenna generated revenues of 707 million RUB in 2013, while for the first half of 2014 the company managed to achieve 399 million RUB.
In 2013 Avicenna performed 231,786 out-patient treatments, 4,222 of in-patient treatments, 989 of IVF cycles and 360 deliveries. The first six months of 2014 have demonstrated improving operating results within the group of Avicenna clinics. The total number of deliveries was 187, the number of in-patient treatments was 2,338 and in addition to this there were 121,920 out-patient treatments and 490 IVF cycles completed.
In 2007, Avicenna was certified and currently holds a valid certificate of quality system ISO 9001:2008.
About Novosibirsk region
Novosibirsk is the third largest city in the Russian Federation, and is the administrative center of the Novosibirsk region with a total population of 2.7 million. In the region there are approximately 38,000 deliveries per annum and the corresponding birth rate of 14.2 per thousand people is higher than the average rate in Russia.