Egypt is on a long-term mission to attract an ever-growing volume of foreign investment into projects that range from solar-powered desalination plants and the digitalization of its education system to the electrification of its transport infrastructure. In the process it is enjoying the continent’s second largest foreign direct investment (FDI) inflows, a success story due in part to the professionalism and financial acumen of private equity firms like B Investments.
Established in 2006, B Investments is held in high regard for its ability to create value for investors and portfolio companies that operate across an array of sectors, including healthcare, real estate, non-banking financial services, renewable energy, manufacturing and the food and beverage industries.
“One of our great strengths is that we have been able to adapt very, very quickly to changing circumstances,” says B Investments chairman and cofounder Hazem Barakat. “This is particularly useful when you are operating in a developing country which has experienced its ups and downs.”
Another of B Investment’s core strengths is the quality of its staff, who have successfully leveraged over 300 years of combined financial and operational experience to identify some of the country’s most promising investments and to maximize shareholder value.
Listed on the Egyptian Exchange since 2018, B Investments plays an increasingly important role in the development of Egypt as a whole. In May, for instance, B Investments entered into a partnership to provide the country’s pharmaceutical sector with a dependable one-stop shop for all its logistics, administrative, distribution and trade requirements. It is also committed to sustainable growth and has been instrumental in securing funding for several of Egypt’s growing arsenal of solar power installations.
Barakat is now looking to roll out the business model across Africa and the Middle East, while remaining supremely confident about his company’s domestic growth prospects. “Egypt is a big country with a growing economy,” he says, “and with the government’s imminent focus on encouraging FDI, there is a good chance it will become an international manufacturing hub.” With B investments on hand to lend support every step of the way.
The Sovereign Fund of Egypt (“TSFE”) through its healthcare and pharmaceutical industries Subfund (“TSFE Healthcare & Pharma Subfund”) and B Investments Holding S.A.E. (“B Investments”), BPE Partners’ flagship investment vehicle, are pleased to announce the signing of two agreements to invest over EGP 2 billion in specialized healthcare, and pharmaceuticals distribution and trade services in Egypt.
The first agreement stipulates that TSFE commits to invest EGP 100 million in B Healthcare Investments S.A.E. (“BHI”). BHI was established by B Investments as its designated investment vehicle to invest in the Egyptian specialized healthcare sector with an initial focus on fertility, mother-and-child, and related services businesses. Currently, BHI owns 51% of the Egyptian IVF Center, the pioneer of in-vitro fertilization (“IVF”) and one of the leading fertility centers in Egypt and the MENA region. BHI is targeting to raise up to EGP 1 billion of which B Investments and TSFE have committed to invest EGP 200 and EGP 100 million, respectively, with the rest to be offered to local and regional private sector investors.
Through the second agreement, B Investments will invest in TSFE Healthcare & Pharma Subfund’s established investment platform dedicated to investing in pharmaceuticals distribution and trade services. The platform aims at enhancing efficiencies and injecting capital to support infrastructure upgrades required to institutionalize the sector. The platform will be partnering with local champions in the market to accelerate their growth into under-served cities in Egypt and across the region. It will also aim at leveraging the latest technological solutions to provide a wide range of digital offerings that will lead to cost efficiencies, ensure market stability, and improve customer experience. A total of EGP 1.2 billion will be deployed in the first phase with aspirations to grow even further as more investment opportunities arise.
“TSFE prioritizes the development of the healthcare sector as a prerequisite to achieving sustainable and inclusive economic growth, in line with Egypt’s Vision 2030 goals, as well as the Sustainable Development Goals (SDGs)” said H.E. Dr. Hala H. ElSaid, Egypt’s Minister of Planning and Economic Development and Chairperson of TSFE. “These two investments contribute to providing Egyptian citizens with improved services and are a step forward towards institutionalizing the sector. In addition, TSFE’s investment model is also realized whereby its mandate of partnering with private investors and developing key strategic sectors while achieving sustainable financial returns for future generations, is fulfilled”.
H.E. Dr. Khaled Abdel Ghaffar, Minister of Health and Population, affirmed that the political leadership supports collaborative and developmental efforts between the public and private sectors, stressing that the Egyptian state is committed to achieving the goals of sustainable development and Egypt’s Vision 2030, which prioritizes raising the standard of healthcare services offered to Egyptian citizens. Thus, the Ministry of Health and Population is keen to promote investment in the healthcare sector in cooperation with businesses and investors in the field, following a sophisticated vision and strategy that aim to position Egypt among the ranks of developed countries when it comes to investment in healthcare.
“The ministry adopts a strategic approach to create partnerships with both domestic and international private sector companies in the fields of healthcare and pharmaceutical industries, enabling it to gradually transition from being a medical service provider to a regulator in order to provide better health care services to patients. We highly value our relation with The Sovereign Fund of Egypt and BPE’’ H.E. added.
“We are honored to partner up with TSFE to invest in the Egyptian specialized healthcare space” stated Mr. Hazem Barakat, Co-founder and Chairman of B Investments. “We recognize the significant value that TSFE brings to BHI and are looking forward to support and grow local healthcare players. “
“This partnership marks TSFE’s first investment into the healthcare and pharmaceutical services industries. We are glad to partner with BPE Partners who possess the required investment management expertise to realize our shared vision of providing affordable, high quality healthcare services across all regions in Egypt. Together, we will capitalize on the sector’s potential for growth with a larger geographical reach and technology enablement” said Mr. Ayman Soliman, CEO of The Sovereign Fund of Egypt. “TSFE’s trade pharma platform is an integral pillar in the subfund’s strategy. Egypt’s pharmaceutical industry is currently worth over EGP 130 billion and our aim is to provide investment solutions to enhance governance, achieve cost efficiencies and ensure market stability to unlock the sector’s full potential” he added.
“We are excited to invest alongside TSFE in this strategic sector of the Egyptian economy” added Mr. Mostafa El-Anwar, CEO of BPE Partners. “We intend to leverage our collective investment management expertise to institutionalize local healthcare businesses, expand healthcare services to the wider demographic of Egypt, and implement high ESG standards to support the competitiveness of the Egyptian healthcare market.”
Both transactions are subject to customary regulatory approvals and are expected to close during the first half of 2023.
B Investments’ board has accepted a binding offer for the acquisition of its entire stake (economic interest of 44.7%) in Giza Systems by Solutions by STC, a subsidiary of Saudi Telecommunication Company (STC). The offer values 100% of Giza Systems at an Enterprise Value of USD 145 million. The final Equity Value will be determined based on net debt and working capital figures at closing.
The transaction is subject to finalizing transaction documents and customary regulatory approvals.
B Investments’ ownership in Giza Systems is through its subsidiary Inergia Technologies (“Inergia”). B Investments owns 68.0% of Inergia and Inergia owns 65.7% of Giza Systems. Hence, BINV’s economic interest in Giza Systems through Inergia is 44.7%.
B Investments is pleased to announce the establishment of its specialized healthcare company, B Healthcare Investments, with an authorized capital of EGP 1 billion, which intends to invest in leading companies operating in the Egyptian specialized healthcare sector.
B Healthcare Investments signed transaction documents for the acquisition of a 51% stake in The Egyptian IVF Center as its first investment in the specialized healthcare space. The completion of the transaction is pending regulatory approvals.
The Egyptian IVF Center is one of the leading fertility centers and the first medical facility offering fertility treatment in Egypt. The company offers its patients the full spectrum of fertility services with high medical and ethical standards.