International Finance Corporation acquires 54.23% stake in AAR Healthcare Holdings

EAST AFRICA – A consortium led by the International Finance Corporation (IFC) is set to acquire a 54.23 percent stake in AAR Healthcare Holdings, the operator of hospitals and clinics in Kenya and other East Africa countries, reports Business Daily.

The Competition Authority of Kenya (CAK) approved the proposed transaction which will cost the consortium, Hospital Holding Limited, more than US$15 million (KSh1.5 billion).

The regulator says the buyout will not have a negative impact on competition in the local healthcare sector, noting that the consortium intends to make additional investments in AAR besides retaining its current workforce.

“Premised on the above the, Authority approved the proposed acquisition of 54.23 percent of issued shares from AAR Health Care Holdings Limited by Hospital Holding Limited unconditionally,” CAK said in a notice.

Besides IFC, Hospital Holding’s other investors include Sweden’s State-owned investment company Swedfund and other private entities.

The deal follows IFC’s November 2019 announcement that it had partnered with private investors to raise a total of US$115 million (KSh11.5 billion) to buy significant stakes in health facilities in Kenya and Tanzania.

IFC in 2013 made an individual KSh400 million (US$4 million) equity investment in AAR Healthcare when it operated 28 clinics across the three markets.

IFC says its investment in AAR is motivated by the growing trend towards private health care in Africa.

World Bank Group studies show that 50 percent of health expenditure in sub-Saharan Africa is financed by out-of-pocket payments from individuals,” IFC said.

AAR is an operational holding company which owns and operates 40 primary care clinics in East Africa and a hospital in Uganda.

AAR currently operates 40 primary care clinics in East Africa and a hospital in Uganda. It serves over 300,000 clients annually from across the social divide.

In Kenya, it runs 21 primary outpatient healthcare clinics providing consultation, laboratory, pharmacy and basic radiology services, giving it a 0.6 percent market share in Kenya.

AAR Healthcare employs experienced medical and management staff and use internationally approved disease management protocols and drug formulary supported by the state-of-the-art information technology systems to provide consistent treatment for our clients from anywhere in East Africa.

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