(Bloomberg) -- Gulf Pharmaceutical Industries is exploring the sale of its Middle Eastern retail pharmacy network amid heightened demand for health-care services in the region, according to people familiar with the matter.
Julphar, as the company is known, is sounding out potential buyers for Planet Pharmacies and seeking around 1 billion dirhams ($272 million), one of the people said, asking not to be named because the information is private. EY is advising on the sale, the people said.
Representatives for EY declined to comment, while officials at Julphar, which is based in the emirate of Ras al Khaimah, didn’t respond to requests for comment.
The Gulf region’s health-care sector has been booming over the past decade as strong economic growth increased government spending in the industry and boosted middle-class incomes. Investment bank Alpen Capital estimates that the region’s health-care expenditure will grow 5.4% annually to reach $135.5 billion in 2027, according to a report earlier this year.
In 2019, Julphar ran into financial trouble after exports to some of its key markets were temporarily suspended. The company then went through several management changes and a restructuring to turn the company around. Earlier this year, it signed a licensing partnership with China’s Sunshine Lake Pharma that makes Julphar the first pharmaceutical firm in the Middle East and North Africa to localize modern insulin analogues manufacturing.
A sale would add to a growing list of deals in the regional health-care sector. Dubai-based private equity firm Fajr Capital is part of a consortium seeking to buy a stake in Aster DM Healthcare Ltd.’s Gulf business, Bloomberg has previously reported. Aster DM operates hospitals, clinics and pharmacies across India and the Gulf region.
Planet Pharmacies was set up in 2007 and now comprises around 270 retail pharmacies and wholesale distribution in Saudi Arabia, the United Arab Emirates and Oman, according to its website. The company’s sales rose 7.1% in the first half of the year, the company said.
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