London-listed Integrated Diagnostics Holdings (IDH) has created a joint venture with Man Capital, the investment arm of the billionaire Mansour family, to acquire Nigerian medical diagnostics business Echo-Scan.
The two firms have partnered with the World Bank's International Finance Corporation to invest $25m in Echo-Scan, which is one of the biggest medical diagnostics players in sub-Saharan Africa.
IDH, which usually provides medical diagnostics in Egypt, Jordan and Sudan, saw its shares climb by more than four per cent on the news.
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“Nigeria’s healthcare industry shares multiple similarities with Egypt’s in the 1980s and 1990s in terms of structure, pace of development and the emerging disease profile of patients,” said IDH's chief executive Hend El Sherbini.
“This is an environment in which we know how to operate: we have done it before in Egypt, Sudan and Jordan.”
For Knightsbridge-based Man Capital, the investment group of the £6bn-revenue family-owned Mansour Group conglomerate, Echo-Scan is the first deal in more than a year and its first foray into healthcare.
The firm has invested in a number of high-profile startups including Deliveroo, Snapchat and Airbnb, and in 2011 it bought freight giant OTS Logistics outright for $400m.
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“For anyone ready to take a long-term investment view, the opportunity for growth and economies of scale are clear,” said founder and chairman of Man Capital Mohamed Mansour.
“With thousands of small clinics, hospitals, and diagnostic centres spread across 36 states, Nigeria’s healthcare market is extremely fragmented and poorly provided for.”
The investment comes as demographic shifts in countries such as Nigeria, which has seen a rapid expansion in households termed “middle class”, have drawn Western investors.
In a recent look-ahead to next year, investment giant UBS Asset Management predicted emerging markets would provide opportunities in 2018 citing forecasts which suggest earnings growth in these regions will be stronger than at any time since 2010.
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