RH Bophelo has successfully positioned itself as an African healthcare investment company working steadfastly towards ensuring that all South Africans can access quality healthcare services. When you invest in RH Bophelo, you invest in infrastructure, hospitals and businesses that enable us to contribute towards ameliorating South Africa’s healthcare system. We are pleased to announce that, through the efforts of our investors, we have acquired 25.0% of the issued share capital in Genric Insurance, a market leader focused on bringing niche insurance solutions to the market by partnering with specialist underwriting management agencies (UMAs), start-up businesses, insuretech innovators and brokers. The acquisition forms part of RH Bophelo’s objective to build an interconnected healthcare ecosystem.
South Africa’s healthcare sector is fraught with inequalities that are a result of our past, wherein the majority of black South Africans were subjected to poor healthcare services, amongst other injustices. Understandably, it’s taking the government time to level the playing field as it pertains to healthcare provision. The capital that we have raised makes us better able to buttress a healthcare system that is overwhelmed and requires as much assistance from the private sector as possible.
RH Bophelo identified Genric as a valuable acquisition due to the company’s unique insurance solutions and business model, which will go a long way in making sure that we continue to ensure that hospitals in the RH network are managed effectively. “The strategic rationale for the purchase of Genric is the continuation of the theme that hospitals are infrastructure, however, to be a successful operator of hospitals, management must develop products that allow the majority of people to access the hospitals (infrastructure) at price points that are sustainable,” notes Colin Clarke, chairman of RH Bophelo’s investment committee.
Moreover, the acquisition creates a platform for RH Bophelo’s target clientele as it will enable our companies to offer a full suite of services from healthcare to insurance. Insurance is a key mechanism that will be used to capture the spend within RH Bophelo’s ecosystem. Furthermore, RH Bophelo will be equipped to insure not only infrastructure but also medical equipment, patients and doctors.
Our strategic rationale for acquiring Genric also includes the following:
- Genric can issue guarantees for development to bankers.
- RH Bophelo will be able to write products with access to the actuaries within Genric.
- It presents us with an opportunity for revenue diversification.
- We will have a higher return profile in financial services as compared to infrastructure.
The equity in Genric was acquired from the existing shareholders, IM Investments and Borman Consulting. The acquisition was performed through RH Bophelo’s wholly-owned subsidiary, RH Financial Services Proprietary Limited (RHFS), which was established specifically for the purpose of acquisitions. By adding Genric to our portfolio, we will be able to eliminate traditional industry borders and innovate and grow our value chain.
RH Bophelo (through RHFS) will, inter alia, acquire 25.0% of the entire issued share capital in Genric for a total consideration of R52.5 million as follows:
- Cash of R45.0 million from RH Bophelo’s existing cash resources
- RH Bophelo will acquire an interest bearing shareholders loan of R7.5 million at an interest rate of prime less 3.5% for R7.5 million in exchange for an issue of RH Bophelo shares, which shares will be issued at RH Bophelo’s 30-day volume-weighted average price (“VWAP”) calculated as at the date the conditions precedent to the agreement having been fulfilled or waived (as the case may be).
As noted by Colin, “Genric has the in-house capacity to develop products that allow access to the RH network of hospitals that are relevant to the majority of South Africans.” Through Genric, we hope to explore other opportunities in the property and healthcare sectors.
For more information on the Genric acquisition, contact us on +27(0)10-007-2171.