HomeFeatured BlogsIPO Candidate Amanat Targets Crowded Local Education, Health Sectors

IPO Candidate Amanat Targets Crowded Local Education, Health Sectors

Children sit in their classroom in Dubai. IPO candidate Amanat is betting that healthcare spending and student enrolments in the Gulf will continue to grow rapidly.
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As U.A.E.-based greenfield company Amanat prepares to launch its initial public offering in Dubai next week, its target sectors healthcare and education appear increasingly crowded.

Amanat is hoping to raise $374 million from investors, funds it will mainly use to invest in three to six businesses in the Gulf region in the next two years, the company’s chairman Faisal Bin Juma Belhoul said on Wednesday.

Amanat is betting that healthcare spending and student enrolments in the Gulf will continue to grow rapidly. Alpen Capital in a report released earlier this year projected that the healthcare industry in the GCC is set to grow 12% a year to $69.4 billion by 2018. In a separate report that covers the education sector, Alpen predicts the total number of students in the GCC to reach 13.7 million with total number of schools to rise at an average of 2.4% between 2013 and 2020.

In other words, a large part of Amanat’s future success depends on the upbeat forecasts for the region’s healthcare and education sector becoming a reality. But Amanat isn’t alone in identifying the potential in these two sectors.

Amanat is likely to face competition from domestic private equity firms such as The Abraaj Group and Gulf Capital which both have earmarked healthcare and education as those market segments where they seek investments.

Illustrating the appetite for healthcare or education investments, Fajr Capital on Wednesday said it acquired a significant minority stake in Dubai-based school operator GEMS Education alongside Bahrain’s investment arm and U.S. private equity group Blackstone .

Amanat’s chairman Mr. Belhoul is certainly not a newcomer to the healthcare market and knows what he is getting himself into. Ithmar Capital, the private equity group he founded in 2005, took Al Noor Hospitals public in London last year.

Mr. Belhoul said Amanat’s competitors include both private equity funds and larger businesses.

“The first one has an exit horizon and that typically is not very desired by leading business owners who don’t want to see a continuous change in their shareholder base,” Mr. Belhoul said. The larger groups who buy healthcare or education assets are likely keen on integrating these in their existing business, Mr. Belhoul argues.

“Amanat, being a provider of long-term capital, doesn’t have that problem and offers a much better and compelling solution,” he said.

Whether that confidence in his company’s strategy will pay off will become clear in the next year or so when Amanat’s backers will want to see some shrewd investments in return for their trust in a company with no track record or assets.

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(via WSJ Blogs)

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