IHH’s Turkiye ops keen on further acquisitions

Acibadem is eyeing further expansion locally and also into the European and Balkan region.

ISTANBUL: IHH Healthcare Bhd’s 90%-owned Turkiye-based subsidiary Acibadem Healthcare Group aims for a continued strong growth path in the company amid superior profit margins.

The company, which is the dominant player in the upscale private healthcare in Turkiye, is eyeing further expansion locally and also into the European and Balkan region.

“If we deem it so, we are on the verge of bigger investments here. As we are public listed through IHH, it is not appropriate to divulge too much information now,” said Acibadem’s founder and chairman Mehmet Ali Aydınlar at a Fireside chat during a press and analyst briefing on Tuesday.

“In every dimension and size of acquisition we pay close attention to profitable investments.

“We cannot possibly acquire a loss-making company and turn it around – we do not have such a consideration.

“But we can acquire a profitable investment and make it more profitable,” Mehmet added.

Speaking through a translator, Mehmet pointed out of its investments in Bulgaria – Acibadem City Clinic which has three hospitals, one medical clinic and a total capacity of 881 beds which it had managed to more than double returns to shareholders post-acquisition.

“In Bulgaria, we had eight times earnings before interest, taxes, depreciation and amortisation (Ebitda) margins and we improved it to 20 times Ebitda margins now,” he said.

“Any acquisitions moving forward can be of a varied size, but of course, we would not be interested in tiny investments but more of mid to big-scale type of investments.

“We have encountered various opportunities, we evaluate them and we try to grow with the best ones,” Mehmet added.

Meanwhile, he said these investments outside of Acibadem’s home country in Turkiye towards the European and Balkan region can help it diversify its sources of revenue.

This is as the Turkyish lira has seen a significant depreciation of some 273% since January 2021.

“Here, we have faced a very significant devaluation in the currency recently – so our investments in Europe and international patients there are like a lifeline for us,” he said.

“Some 20% to 25% of our turnover is due to our international patients.

“And almost 50% of our revenue originates from our assets in Europe – these are all generated in the euro currency,” he added.

He said this acts like a shield to protect the overall group from any further devaluation of the local currency.

“We do value this aspect a lot,” Mehmet said.

Acibadem’s latest acquisition earlier this year is in Turkiye for the 100% purchase of the Kent Health Group in the region of Izmir, which Mehmet said is focused on improving its yields now.

“For Kent, we are revamping it altogether – architecturally and technologically. We are also going to enhance its capacity further. This will be a three-year process and it will be done as Kent continues on its operations,” Mehmet said.

“As for Bulgaria, our investments are proceeding very well. We are also reinforcing them technologically and will continue to do so, especially for cancer-related technologies,” he added.