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Healthcare Mergers and Acquisitions Fuel Growth in Nigeria

How local and foreign investors are transforming the healthcare landscape in Africa’s most populous country

by Motoni Olodun

Nigeria’s healthcare sector is witnessing a wave of mergers and acquisitions (M&As), boosting the operations and market share of hospitals and pharmaceuticals. The M&A deals, which involve local and foreign investors, are driven by the growing demand for quality healthcare services and products in the country, as well as the need to overcome the challenges of inadequate infrastructure, human resources, and regulatory frameworks.

According to a report by Bowmans, a South African law firm, the pharmaceutical, hospitals, and biotech industries had the most transactions on the M&A front in recent years. Some of the notable deals include:

  • Iwosan Investments’ purchase of Lagoon Hospital in 2022, creating Iwosan Lagoon Hospitals, which plans to open a 27-bed wellness center in Victoria Island, Lagos, catering to specialties including advanced heart care. The investment group is led by Fola Laoye, co-founder and CEO of Iwosan Investment, and Fola Adeola, co-founder of Guaranty Trust Bank. Olugbenga Agboola, the founder of Flutterwave, also joined the hospital board as a director.
  • AfyA Care Nigeria’s purchase of majority stakes in R-Jolad Hospital in 2021 brought the total bed capacity of the hospital to over 215 across four additional facilities in Lagos. AfyA Care, led by Tosin Runsewe, who also chairs the board of Evercare Hospital, Lekki, invests in promising assets, including insurance and health tech companies. It holds stakes in 140-bed development under Oakwood Medical Centre and manages EROM Diagnostics; Octosoft, a health tech; and Bastion HMO, a health insurance company.
  • St Nicholas Hospital’s acquisition of smaller hospitals to expand its market presence in Lagos. It acquired the former Robertson Medical Centre to create its new facility in Surulere, as well as the former Maryland Specialist Hospital for its new operations in Maryland.
  • Evercare Hospital acquired Doctoora Health, a Nigerian telemedicine start-up, in 2023. The acquisition integrated Doctoora’s services into EverCare’s suite of digital health solutions as Debo Odulana, co-founder of Doctoora Health, joined Evercare as its chief innovation officer. Doctoora enabled patients to book virtual consultations and lab tests and purchase medicines remotely.
  • Verod Capital Limited’s acquisition of a minority equity stake in Medplus, a major Nigerian pharmaceutical retail business, in 2022. The investment provided the growth capital needed to accelerate Medplus’ expansion plans, which brought its total outlets across the country to 108. Medplus is the pioneer and largest Nigerian pharmaceutical retail business, with about three decades of operations.

These M&A deals reflect the increased investor appetite for the Nigerian healthcare sector and the interest in exploring the opportunities in the lags that plagued the healthcare system for years. The COVID-19 pandemic has also exposed the vulnerability of the health system and the need for more investment and innovation. The demand for healthcare in Nigeria was valued at $15 billion in 2018 and is projected to hit over $18 billion at the end of 2023, according to a report by Healthcare Resource Guide.

The M&A trend is expected to continue as more healthcare providers seek to scale up their services, improve quality, and reach more customers. The government and the regulators also have a role to play in creating an enabling environment for the private sector to thrive and contribute to the health security and well-being of Nigerians.

Source: Business Day


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