M&A demand is expected to flourish in UAE’s Healthcare

The healthcare industry in the UAE has grown dramatically over the last decade, as indicated by the increasing number of hospitals and clinics around the nation. The emirates of Dubai and Abu Dhabi are leading the way in the sector, which, without a doubt, is one of the UAE’s most rapidly rising sectors. The pandemic put a strain on every element of the industry, but in order to survive and prosper, the UAE’s healthcare organisations devised a well-thought-out strategy for minimising disruption, and it successfully halted the pandemic’s spread to a large extent.

Following COVID-19, Mergers & Acquisition (M&A) operations in the UAE’s health industry is turning the tide with investment firms indicating potential in healthtech and medtech assets. As corporations re-evaluate their business strategy and exhibit healthcare sector investment as ‘caution,’ the current trend shows a move from provider consolidation to strategic asset acquisition.

In the short to medium run, the following regions are expected to be “M&A magnets” in the UAE healthcare industry.

• To resolve crucial challenges and increase employee performance and process optimization, suppliers will constantly find value in implementing HealthTech tools like artificial intelligence (AI), analytics, and cloud technologies.
• Telehealth constitutes a modest aspect of most healthcare solutions, although it has been gaining popularity during the COVID-19 outbreak. Providers will try to discover specific areas where telehealth may be used to supplement current capabilities.
• Providers will strive to incorporate complicated MedTech services as it evolves from experimental to the mainstream, in order to improve patient care. To enhance results, leading institutions are expected to construct their value offer around a series of good physicians and comprehensive MedTech assistance.
• Relevant partners are expected to keep working on standardisation with the goal of compensating for value-based treatment.

Between 2016 and 2021, Provider acquisitions or mergers contributed to 81 percent of agreements; however, after COVID-19, there has been an upsurge in HealthTech/MedTech and Pharma transactions. Investment funds boosted deal activity in the first half of 2021, responsible for 58 percent of all deals, compared to 41 percent between 2016 and 2020. Several investment funds have been involved in the healthcare industry as a result of the COVID-19 impact, motivated by the industry’s stable profitability and long-term growth outlook.

It is expected that in the near future, more decisive transactions will dominate healthcare M&A, with sustained growth in tech-enabled health sector. It is expected that investment funds will play an even more vital factor by taking dominant positions in HealthTech assets. With the basic pillars of the field remaining robust, the forecast for transactions in the UAE remains favourable.

As a result of many enterprises in this health sector establishing their foundation in Dubai, the need for business valuation and due diligence services in this sector is becoming more critical. This shift in attention and increased activity in this sector throughout the world, the requirement and occurrences of value are on the rise.

Financial reporting, acquiring and selling a firm, mergers and acquisitions, and spin-offs are all reasons for business valuations. HLB HAMT has done several such valuations and due diligence exercises for transactions in Dubai, Abu Dhabi and other emirates of the UAE. A business valuation and due diligence performed by a professional firm will highlight areas of opportunity in valuations where you can increase profits and optimize your costs, as well as highlight risks using an exhaustive due diligence process.

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