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In the European Economic Area, with respect to any Member State that has implemented Directive 2003/71/EC, as amended, (together with any applicable implementing measures in any Member State, the "Prospectus Directive") this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.
The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States unless the securities are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available. The issuer of the securities has not registered, and does not intend to register, any portion of the offering in the United States, and does not intend to conduct a public offering of securities in the United States. These materials shall not constitute or form part of an offer or invitation to sell or the solicitation of an offer to buy or subscribe, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.
Georgia Healthcare Group PLC (the "Group", or “GHG”), the largest healthcare service and medical insurance provider in Georgia today announces its intention to make an initial public offering (the “Offering”) of its ordinary shares on the premium listing segment of the Official List and to trading on the London Stock Exchange.
The addressable ambulatory clinic market is GEL 0.9 billion in 2015 and is forecasted to grow at a compound annual growth rate of 15.9% during the period 2014 to 2018. GHG’s market share was under 1% at 30 June 2015, with the rest of the market similarly fragmented, with no single player having more than 1% market share and comparable access to capital and management, allowing GHG to have a unique first-mover advantage in this highly-fragmented and underpenetrated ambulatory clinic segment
GHG is the largest healthcare services provider in the fast-growing, predominantly privately-owned, Georgian healthcare services market. Its leadership position is underpinned by offering the most comprehensive range of services targeting the mass market segment through its vertically integrated network of 41 healthcare facilities, and medical insurance products.
grown at a CAGR of 11.1% between 2005 to 2014. Although only 5.8% of GDP is spent on healthcare services, overall healthcare spending has grown at a 13.5% CAGR from 2011 to 2014, with spending by the Georgian Government (the "Government") more than doubling between 2011 and 2015. Recent supportive Government reforms and the significant engagement of private capital in the sector has boosted demand as a result of improved infrastructure and the increased financing of healthcare services by the Government
The Group has grown rapidly in recent years, driven by the significant organic expansion of existing facilities, which has delivered compound annual organic earnings growth of 23.6% over the last three years, and by selectively acquiring and integrating a number of complementary businesses and assets. Total revenue has increased from GEL 119.4 million in 2012 to GEL 196.3 million in 2014, EBITDA from GEL 23.3 million to GEL 36.9 million, and number of beds from 1,041 to 2,140. In the first half of 2015, the Group further increased the number of beds to 2,220 (with additional 450 beds acquired in August 2015) and reported total revenue of GEL 108.8 million and EBITDA of GEL 23.6 million, with an EBITDA margin of 25.3% in healthcare services.
Nikoloz Gamkrelidze, CEO of Georgia Healthcare Group, added:
“The IPO on the LSE premium segment will enable us to finance our immediate growth plans and if necessary provide access to capital markets for our future growth. We are targeting to increase our market share within the GEL 2.1 billion healthcare services market in 2015E through revenue enhancement at our hospitals where our current market share is 17.6% of the GEL 1.2 billion hospital services market. GHG is also expanding into the GEL 0.9 billion ambulatory clinics services market, where our current market share is close to zero.
The IPO will enhance the Group’s profile with investors, business partners and patients. This move will increase the ability of the Group to attract and retain key management, physicians and other employees, and diversify the shareholder ba
Irakli Gilauri, Chairman of Georgia Healthcare Group, commented:
“The current management has taken remarkable advantage of their vital resource – access to capital and high quality management – and created the clear single largest player in the Georgian healthcare market; GHG is transforming the industry. The clear growth vision of the management, combined with GHG’s hospital expansion capabilities, first mover advantage in the highly fragmented and vastly underpenetrated ambulatory segment, creates a highly
attractive investment opportunity in Georgian healthcare services industry. Over the last few years, current management has delivered an excellent track record of earnings growth in the hospital business. Therefore I strongly believe in their ability, going forward, to deliver further outstanding growth, particularly in the ambulatory business.
At IPO, I personally, along with many of my colleagues on the Board and management team, intend to invest. Full details will be announced in due course. BGH has been a strong and committed shareholder to the development of the healthcare business for many years and intends to maintain this support over the next few years. The IPO will provide further capital for GHG’s exciting growth plans, whilst creating the opportunity for the Company to develop its own international institutional shareholder base. GHG’s culture of transparency and the adherence to robust corporate governance policies strongly positions the Group for a premium listing and the FTSE All-Share Index inclusion.”
Details of the Offering and Use of Proceeds
The contents of this communication, for which the Group is responsible, have been approved by Citigroup Global Markets Limited and Jefferies International Limited who are regulated by the United Kingdom Financial Conduct Authority, solely for the purposes of Section 21 of the United Kingdom Financial Services and Markets Act 2000. Citigroup Global Markets Limited, Jefferies International Ltd, Numis Securities, Renaissance Securities (Cyprus) Limited and JSC Galt & Taggart are acting for the Group and no one else in relation to the proposed offer of the Group's securities and will not be responsible to anyone other than the Group for providing the protections afforded to their clients nor for giving advice in relation to the proposed offer.
This communication is being distributed only to, and is directed only at (a) persons outside the United Kingdom, (b) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), and (c) high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents In connection with the offer or sale of securities referred to herein, Citigroup Global Markets Limited and Jefferies International Limited may over-allot securities or effect transactions with a view to supporting the market price of the securities at a level higher than that which might otherwise prevail. Any stabilisation action or over-allotment will be conducted by Citigroup Global Markets Limited and Jefferies International Limited in accordance with all applicable laws and rules.
This document is an advertisement and is not a prospectus for the purposes of EU Directive 2003/71/EC, as amended, (the "Directive") and/or Part VI of the United Kingdom Financial Services and Markets Act 2000. A final form prospectus will be prepared and made available to the public in accordance with the Directive. Investors should not subscribe for any securities referred to in this document except on the basis of information contained in the final form prospectus. The final form prospectus, when published, will be available on the website of the Group.
This communication contains certain forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, and can be identified by the use of such words and phrases as “according to estimates”, “aims”, “anticipates”, “assumes”, “believes”, “could”, “estimates”, “expects”, “forecasts”, “intends”, “is of the opinion”, “may”, “plans”, “potential”, “predicts”, “projects”, “should”, “to the knowledge of”, “will”, “would” or, in each case their negatives or other similar expressions, which are intended to identify a statement as forward-looking. This applies, in particular, to statements containing information on future financial results, plans, or expectations regarding business and management, future growth or profitability and general economic and regulatory conditions and other matters affecting the Group.
Forward-looking statements reflect the current views of the GHG's management on future events, which are based on the assumptions of the management and involve known and unknown risks, uncertainties and other factors that may cause the Group’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. The occurrence or non-occurrence of an assumption could cause the Group’s actual financial condition and results of operations to differ materially from, or fail to meet expectations expressed or implied by, such forward-looking statements.
GHG’s business is subject to a number of risks and uncertainties that could also cause a forward-looking statement, estimate or prediction to differ materially from those expressed or implied by the forward-looking statements contained in this prospectus. The information, opinions and forward-looking statements contained in this communication speak only as at its date and are subject to change without notice. GHG does not undertake any obligation to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this communication.