August 20, 2014 / 7:21 AM / 3 years ago

UPDATE 1-Russia's MD Medical expands with $46 mln Avicenna acquisition

* Private healthcare company expands to new Russian regions

* Target Avicenna owns three clinics and a hospital

* Hopes to lead consolidation of burgeoning sector (Adds details)

MOSCOW, Aug 20 (Reuters) - Russian private healthcare company MD Medical Group plans to expand into the country’s third-largest city Novosibirsk via a $45.5 million acquisition, its biggest so far.

MDMG, which specialises in women’s healthcare, said its target Avicenna owns three clinics and a hospital with a maternity ward and is the largest private healthcare company in Russia outside Moscow and St Petersburg.

MDMG already operates 17 medical centres, including two hospitals and 15 out-patient clinics in Moscow, St Petersburg, Perm, Ufa, Irkutsk, Samara and Yaroslavl.

It is the only Russian company in the sector to have floated its shares, having raised more than $300 million in a London share sale in 2012 to expand its clinics chain, benefiting from a growing middle class and private medical insurance.

The company had said it hoped to lead a consolidation of the burgeoning and highly fragmented sector, which has emerged as a competitor to the ailing system of public hospitals and clinics that often fail to meet demand for quality services.

The Avicenna acquisition is expected to lift MDMG’s earnings in the current financial year, it said in a statement. Avicenna generated 707 million roubles ($19.5 million) in revenue in 2013, compared with MDMG’s revenue of 5.7 billion roubles.

MDMG will use a bank loan to fund 80 percent of the acquisition cost, with the rest covered by its own cash. The deal is scheduled to be completed in the fourth quarter, subject to regulatory approvals and other conditions. (1 US dollar = 36.2225 Russian rouble) (Reporting by Maria Kiselyova; Editing by David Holmes)

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