Turkish Healthcare Market attracts foreign investors

                                                                                                                  

Version française : Fusions acquisitions - Le secteur de la santé en Turquie

Healthcare M&A Activity in Turkey 

The promising Turkish healthcare market has become a hot spot for foreign investors in recent years. Government investments under health transformation programme leading to hospital modernization as well as the consolidation of middle class and high disease burden played an important role in positioning the country as a strong investment destination for healthcare.

 Having an industry of over $21 billion in 2011, the total healthcare market in Turkey is expected to grow at a CAGR of around 9% due to the size of the population and current low consumption rate along with increasing access to funding and private sector expansion.

Cross-border Healthcare M&A in Turkey 

Remarkable Cross-border deals since 2010

 Turkish healthcare market has seen significant foreign investments since 2010 particularly from Germany and Sweden, resulting in high level of deal activity with domestic acquisitions. On the other hand, the acquisition of Acıbadem Sağlık Hizmetleri by Malaysian healthcare giant IHH for $1,260 billion had been one of the most important deals in terms of deal value.

Likewise, American pharmaceutical company Amgen’s acquisition of Mustafa Nevzat İlaç has been a remarkable M&A transaction in pharmaceutical sub-sector. Turkish pharmaceutical sector may be considered already foreign dominant market due to the establishment of international production bases in the country to benefit from Turkey’s geographical position.

 Moreover, majority of the domestic firms were acquired by global players owing to highly skilled human resources in production and management as well as the unsaturated domestic market with high growth potential. Yet there are still available opportunities worth considering. In addition to remarkable strategic investments in this sector, financial investors has also been highly interested in healthcare.

 International Private Equity Activity* 

*completed cross-border deals in healthcare since 2010

Regarding financial investments, UK private equity funds were the most active foreign investors followed by Kuwait in terms of deal volume. On top of population growth and improving demographic indicators, skilled workforce and a gradual rise in life expectancy attracted their interest in Turkish healthcare market.

Moreover, significant private equity exits in the sector also demonstrate the high potential of Turkish healthcare market. For instance, Abraaj Capital’s secondary sale of Acıbadem Hospital and Marfin Investment Group’s exit of Şafak Hospital are important signs for opportunities in the market as those transactions were considered profitable for both sides.

To sum up, sustaining growth of the Turkish economy in the post-crisis period will continue to whet the appetite of both financial and strategic investors, leading increasing healthcare M&A in Turkey and global market growth in the forthcoming years.

Melih Ardalı

For further information: mergerturkey@gmail.com Tweets by @merger_turkey