AAR Healthcare

completed

AAR Group (the “Group” or “AAR”) is one of the largest providers of health insurance and outpatient health care services in East Africa, operating 27 clinics in Kenya, Uganda and Tanzania (11, 8 and 8 clinics respectively) and providing health insurance to some 190,000 clients. The Group has recently been restructured, with the help of IFC, into AAR Insurance and AAR Healthcare. The strategy for AAR Healthcare, once separated from AAR Insurance, is to; i) diversify its patient base away from AAR insurance customers (currently 62% of patients, down from 90% in 2006); ii) continue to expand its network of outpatient clinics in East Africa; and iii) move up the value chain by introducing specialist consultation, imaging and diagnostics to select clinics, and by entering the inpatient care market through the acquisition of stakes in hospitals which could act as referral points for AAR out-patients. IFC is considering an equity investment of $4.5 million which will be used for the expansion strategy, including acquisition of two medium-sized hospitals; opening twelve new clinics (four in each country in which the Group operates); upgrading two established clinics and introducing an integrated IT platform to drive operational efficiency.