Big battalions win the day
It is very clear now that the future in emerging markets lies with the big platforms who can offer a wide array of services and benefit from economies of scale. look at how NMC has seen its market capitalisation rocket by nearly £200m after making two acquisitions for little more than a quarter of that sum.
Investors get this. Look at how Carlyle has acquired a substantial slice of Rede D’Or, the largest Brazilian chain. Or the very high value put on IHH, the ultimate Asian hospital platform.
In contrast, it is not hard to find investors who are struggling having opened a few clinics in a country or a continent. The energy and time it takes to manage them is almost never balanced by the return.
The development of patient choice and the web means that size does matter when it comes to your marketing budget. And it is worth noting that often the big platforms (think Fosun in China or NMC in the UAE) are vertically integrated. Owning medtech distribution channels and even medtech companies can really pay off. That reflects the fact that medtech margins here are often extraordinarily high in these markets.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
