New Delhi, July 30 -- Gulf Capital, a UAE-based private equity firm that manages over $2.4 billion in assets, has partially monetized its investment in a fertility chain business from its third fund through a strategic stake sale to a global reproductive medicine group backed by a global PE firm. The partial exit comes more than five years after the initial investment.
This marks Gulf Capital's fourth exit from its third vehicle, GC Equity Partners III, which has a corpus of $750 million.
The Abu Dhabi-headquartered firm has sold its majority stake in ART Fertility Clinics' Middle East operations to KKR & Co-backed IVI-RMA Global, one of the world's largest assisted reproduction groups.
Global alternative asset manager KKR had acquired an 80% stake in IVI-RMA Global in 2023 in a $3.25 billion deal. The group operates more than 70 fertility clinics across 12 countries.
Launched in early 2015, ART Fertility Clinics is a provider of fertility treatments and operates across the UAE, Saudi Arabia, and India. Gulf Capital had acquired it in January 2020 for over $100 million.
While the firm did not disclose the transaction numbers, it said that the deal will generate a significant return on invested capital, "making it one of Gulf Capital's most successful exits to date.
"ART Fertility's expansion and financial performance underline Gulf Capital's deep focus on operational improvements and growth. Following a competitive auction, the successful sale of the company to a global strategic buyer highlights Gulf Capital's ability to source, grow and exit healthcare platforms at very attractive multiples," said Karim El Solh, co-founder and CEO, Gulf Capital.
In 2021, Gulf Capital invested $30 million to expand ART Fertility Clinics to India. Thereon, ART expanded from a UAE-focused business into a regional fertility platform with 15 clinics, including three in the UAE, one in Saudi Arabia, and 11 in India.
"We had invested in this business around five years ago. In 2020, we put in around $100 million, and we have grown the business from three clinics to 15 clinics. We took it to Saudi Arabia and India, did the whole rebranding and a relaunch, and continued investing in infrastructure. We grew profitability fourfold over the investment period, and we continue to drive for expansion," said Hazem Abu Khalaf, managing director and head of healthcare investments at Gulf Capital.
The scope of the transaction includes clinics in the UAE and Saudi Arabia. The India operation will remain under the ownership of Gulf Capital.
According to Gulf Capital, ART Fertility Clinics Middle East has delivered substantial revenue and EBITDA growth since 2020, with profitability quadrupling over the last five years.
Khalaf told VCCircle that the PE firm is looking to further grow its India business. "We remain very excited about the Indian market. The growth trajectory in the Indian fertility sector is very aggressive. We hear about a lot of transactions happening there at very attractive valuations. So we'll continue investing and growing the India business," said Khalaf.
Other key exits from Gulf Capital Fund III include Egypt-listed Middle East Glass S.A.E. (MEG) and manpower outsourcing company in offshore energy sector Kuiper Group.
The Abu Dhabi-based asset manager also exited its investment in Metito Holdings, a water and wastewater management solutions provider, in September 2023 after 17 years through the sale of a majority stake to Alpha Dhabi Holding.
In November 2022, it exited Chef Middle East, the GCC's premier foodservice distribution business, via a $100 million sale to The Chefs' Warehouse, generating 2.5x returns.
Gulf Capital is now in the process of raising its fourth private equity fund, targeting $800 million-one of the largest investment vehicles in the region-to be deployed across the Middle East and rest of Asia.
Published by HT Digital Content Services with permission from VC Circle.