On 20 November 2017, RH Bophelo (RHB) entered into acquisition agreements with Vryburg Private Hospital (VPH Acquisition) and African Healthcare Proprietary Limited (AHC Acquisition).
As a SPAC with a 24-month timeframe to do its first transaction, RH Bophelo has exceeded projections by transacting within four months. “We’re putting together close to 338 beds. This goes with our ethos to get affordable healthcare by finding the right-priced assets to put on our platform (CEO, Quinton Zunga mentions on PowerFM987).”
Reasons for entering into these acquisition agreements:
Vryburg Private Hospital (VPH)
The 44-beds hospital is located in Vryburg town, North West where the next closest private hospital is 150 kilometres away. The investment will ensure that we improve the hospital’s quality, capacity and service offering. In so doing, the residents’ ability to access quality healthcare, as set out in RHB’s mandate, will be fulfilled. Combined with the AHC Acquisition, RHB will be able to extract efficiencies from the operation, leading to additional cost savings and earnings growth.
African Healthcare Proprietary Limited (AHC)
AHC is a fast-growing company which has experienced immense growth in the five years of its operation by managing three hospitals, including two of its own. “AHC owns and operates the St Helena Private Hospital, a 131-bed hospital in Welkom, Free State, the Fountain Private Hospital, a 163-bed hospital in Carletonville, Gauteng and manages a 115-bed private hospital in Nelspruit as well as a managed care facility in Welkom (Moneyweb).” It is also one of RHB’s cross-cutting platform and anchor investments that the SPAC will use to address: administration, commissioning and the management of hospital infrastructure assets.
As far as categorisation is concerned, following the successful conclusion of the acquisitions, the JSE will no longer classify RHB as a SPAC and, subject to the approval of the JSE and RHB shareholders, it will be re-classified on the Main Board as an investment entity.
We are excited about the investment opportunities these acquisitions present for both our shareholders and us, as well as the ability to accomplish our mandate to provide affordable healthcare. “Healthcare requires more innovation; private healthcare is very expensive and public healthcare is overcrowded. We seek to reduce pressure on public health by providing South Africans with affordable private care (Quinton Zunga).”