Borrowing the best
One of the striking things about Richard Ajayi, boss of Nigerian healthcare group Therapia who we interview here, is the way he has formed a whole network of international alliances to bring healthcare services to Nigeria.
There is a partnerhsip with Austrian IVF chain, Professor Zech, and another to deliver laboratory services with Pathcare in South Africa. But these are just two links in a complex web. For instance, he works with a consultancy in Belgium to for business development and brings in practice managers from India.
It is a fascinating example of an entrepreneur identifying the best and brightest from around the world.
Essentially, we can three levels of such borrowing. The first is a long-term alliance. A Saudi hospital could work with a US hospital group, for instance. Such international partnerships work well as long as the terms are clear. They fail when the borrower just wants the logo and a few names.
The second is a skills transfer alliance. This is essentially what Orpea and Domus VI are doing with elderly care in China and DVD is doing in Russia. The Chinese and Russians pay a management fee to get French expertise. It is probably more risky for the French. Once the Chinese or Russians have understood what is unique about the French model – how to ensure quality through the right culture, how to build the right style of homes, etc, such agreements may have relatively short lives.
The third is where employers bring in foreign expertise as employees. This may involve something as simple as recruiting MBA trained nationals or foreigners who bring business expertise. This fails if the imported manager clashes with the local culture or starts to be perceived as a threat to their authority by the owners.
We think alliances of one form or another are the way forward for Western healthcare service operators who want to move in to emerging markets. The owners tend to be wealthy members of a local elite. Stakes, particularly controlling stakes in companies of scale are, typically, not for sale. Where they are, local expectations, often based on the quirks of local stock markets, mean that multiples are far too high for western companies to make sensible acquisitions.
To enter these lucrative and fast-growing markets you need to build an alliance mentality. That is a big task for many healthcare service companies which tend to be inward looking and often national. They may even be unaware of what skills and expertise they can offer.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.




