The deal aims to expand Dallah Healthcare’s presence across Saudi Arabia and improve the quality of its medical services. Credit: PeopleImages.com – Yuri A / Shutterstock.

Saudi Arabia-based healthcare company Dallah Healthcare Company has signed a share purchase and subscription agreement to acquire Ayyan Investment Company’s shares in Al Ahsa Medical Services and Al Salam Medical Services.

The deal is valued at around SAR660m ($175.8m) and aims to expand Dallah Healthcare’s presence across Saudi Arabia and improve the quality of its medical services.

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Under the terms of the transaction, the company will take over 97.41% of Al Ahsa’s capital and 100% of that of Al Salam through a capital increase mechanism.

Al-Ahsa’s net market value of equity was finalised at SAR420m, with Dallah’s valuation for the shares around SAR409m, while Al Salam’s equity value was agreed on at SAR250.88m.

According to Dallah Healthcare, there is a possibility of an additional cash consideration based on an agreed mechanism to account for certain changes from the signing of the deal to its completion.

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Dallah Healthcare’s valuation for this transaction is set at SAR16.55bn, which translates to SAR169.51 for each share, calculated using the volume-weighted average share price over 106 trading days from February to August.

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The company will increase its capital by 3.99% or SAR38.93m to facilitate the deal.

Following the transaction, the ownership percentage of Dallah Healthcare’s existing shareholders will be adjusted to 96.17%.

The completion of this transaction is now subject to the approval of relevant regulatory authorities.

Founded in 1995, Dallah Healthcare operates across various sectors, including hospitals, pharmaceuticals, management and investments.

The company announced its public listing on the Saudi Stock Exchange (Tadawul) in December 2012.

In April last year, it confirmed plans to develop a 250-bed hospital in Saudi Arabia’s Riyadh-Al-Arid district.