Hygeia 2014

completed

Hygeia Nigeria Limited (“HNL” or “Hygeia” or the “company”), the largest private integrated healthcare services group in Nigeria runs a network of two hospitals and three clinics based in Lagos under the Lagoon Hospitals brand, as well as a health management organisation (HMO) with operations across the country. In Nigeria, outside of the government, private players have typically focused on one segment of the healthcare value chain, making Hygeia one of the few private sector players to operate an integrated model. Hygeia’s hospital business operates under the Lagoon Hospitals brand which provides general, specialist and diagnostic services. Lagoon’s two hospitals (Apapa & Ikeja) and three clinics (Ikeja, Victoria Island and Lagoon Specialist Suite) are all located in Lagos, with the two hospitals accounting for 83% as at FY2015 of Lagoon Hospitals total revenue. Lagoon Hospitals has a strong focus on the organized private sector and in addition to its five facilities, also provides worksite clinics for nine local and multinational companies in Abuja, Kano and Lagos. Lagoon Hospitals was the first operator in sub-Saharan Africa to receive accreditation from Joint Commission International (JCI) and remains one of only two groups with this accreditation in the sub-region. Hygeia HMO provides access to healthcare services mainly to employees of corporate companies and their dependents as well as a number of SMEs across Nigeria. Services include managed healthcare, provision of access to curative and preventive medicine, health risk management, occupational health management, employee wellbeing services and health maintenance services. Hygeia HMO’s healthcare services are delivered to both private and public sector clients via 502 hospitals and clinics in its corporate network and 1,608 hospitals and clinics in its network as at July 2015. Lagoon Hospitals, one of the strongest draws for the core of its enrollee base, accounted for 19% of Hygeia HMO’s capitation and claims payments in FY2015. The opportunity for investment was provided by the company’s issuance of an Information Memorandum (“IM”) seeking new equity capital for the first phase of its growth plan. IFC is proposing to invest up to $12.4mm in equity (the “Project”) in the Hygeia Group. IFC’s investment would be used to fund the first phase of Hygeia’s growth strategy, leasing of an existing property for a new hospital at Hygeia’s Victoria Island (VI) location, beginning of the expansion of Hygeia’s Ikeja and Apapa hospitals and implementing an IT platform upgrade to support the growth of its HMO operations. This capital raise is part of a broader, growth strategy that would help Hygeia increase its capacity from 82 beds in FY2014 to 382 beds in FY2019 and grow revenues from N11 billion (US$65m) in FY2015 to N60 billion (US$187m) by FY2024. For phase 1, the focus of the investment is to ‘construct’ a new hospital at Victoria Island location and expand the Ikeja and Apapa Hospitals. Specifically for VI, the client will be leasing a bigger existing building in VI as a hospital and consolidate its current VI clinic operations.Hygeia is an existing IFC client from previous investments. Over the years, the client has continuously demonstrated efforts to improve its environmental and social (E&S) performance. Hygeia’s senior management has also demonstrated commitment by committing resources to help the hospital group meet IFC E&S requirements. During the course of IFC’s investments with the client, Hygeia has developed and updated E&S systems, policies and procedures to help the hospital group improve its overall E&S performance.