M42 buys European dialysis group Diaverum

G42

• M42 was formed as a joint venture between G42 and Mubadala
• It has purchased the world’s third-largest dialysis provider
• Observers think the Diaverum deal is worth around $2.5bn

Abu Dhabi’s newest tech-enabled healthcare company, M42, has made its first investment with the acquisition of Diaverum, a global renal care service provider.

The value of the deal for Bridgepoint Group’s European dialysis clinic chain was not disclosed, although previous reports by Bloomberg suggest it could be in the region of $2.5 billion.

M42 launched this week as a joint venture between G42 Healthcare and Mubadala Health. The deal immediately makes it the largest healthcare company in the Middle East.

• More GCC healthcare mergers likely as competition hots up
• Mubadala targets European dialysis clinic chain for $2.5bn
• UK pharma startup targets Gulf for future IPO

Hasan Jasem Al Nowais, group chief executive officer and managing director of M42, said the acquisition “represents a major milestone” in the company’s global expansion strategy.

Founded in 1991, Sweden-based Diaverum is currently the world’s third-largest provider of dialysis services, operating across 23 countries, with 440 clinics and over 13,000 employees.

Diaverum CEO Dimitris Moulavasilis said that working with M42 will allow them to: “drive international growth and continue transforming the industry through patient-centric digital innovations.”

The transaction, which is subject to regulatory approvals, is expected to close later in 2023.

Between 8 and 10 percent of the world’s adult population have some form of kidney damage, and every year millions die prematurely of complications related to chronic kidney disease.

The need for dialysis services in Diaverum’s markets grew percent on a compound annual basis between 2012 and 2019. Similar growth is expected over the next decade.

According to research from investment banking advisory firm Alpen Capital, healthcare spending in the GCC region is set to reach $135.5 billion in 2027, implying annual growth of 5 percent from $104 billion last year.

Alpen Capital managing director Krishna Dhanak said that the transaction was “likely to drive competition and require organisations to establish strategic plans for value-creating opportunities, leading to the industry witnessing increased mergers, acquisitions and consolidation”.