Investment Opportunities

in the Health Sector

April 2013

▪ How Can IFC support the Health Care Sector?

(products, value added)

▪ IFC’s Experience in the Healthcare Sector

▪ How can IFC work with the Health Care

Sector?

▪ Examples of Projects

2

Agenda

IFC is a Member of the World Bank Group

3

IBRD International Bank

for Reconstruction

and Development

IDA International

Development

Association

MIGA Multilateral

Investment and

Guarantee Agency

To promote

institutional, legal and

regulatory reform

Governments of

poorest countries with

per capita income of

less than $1,025

Technical assistance

Interest Free Loans

Policy Advice

To reduce political

investment risk

Foreign investors in

member countries

Political Risk Insurance

Est. 1945 Est. 1960

IFC International

Finance Corporation

To promote private

sector development

Private companies in

member countries

Equity/Quasi-Equity

Long-term Loans

Risk Management

Advisory Services

Est. 1956 Est. 1988

To promote

institutional, legal and

regulatory reform

Governments of member

countries with per

capita income between

$1,025 and $6,055.

Technical assistance

Loans

Policy Advice

Role:

Clients:

Products:

Shared Mission: To Promote Economic Development and Reduce Poverty

U.S

.$ b

illio

ns

Total committed IFC financing: US$20.4 billion

Ne

t In

co

me

(U

.S.

$ b

illio

ns)

Ne

t W

ort

h (

U.S

. $ b

illio

ns)

IFC’s Net Income and Net Worth

IFC – Over $100 Billion Invested in EM Since 1956

IFC FY13 Highlights

S&P, Moody’s AAA

Portfolio $65 billion

# of companies >2,00

# of countries 103

Sub-Saharan

Africa 15%

East Asia and

Pacific 14%

South

Asia

11% Europe and

Central Asia

21%

Latin

America

and the

Caribbean

21%

Middle East

and North

Africa 10%

Global

7%

Investments by Region

FY12

4

IFC Investment

Services IFC Advisory Services

IFC Asset

Management

Company (AMC)

Loans

Equity

Short term Finance

Syndications/Mobilization

Securitized finance

Client risk management

services

Treasury services

Liquidity management

Access to finance

Corporate advice

Environmental and social

sustainability

Infrastructure

Investment Climate

Launched in 2009, invests

third-party capital

alongside IFC

Permits outside investors

to benefit from IFC’s

expertise

The African, Latin

American and Caribbean

Fund co-invests with IFC in

Africa, Latin America, and

the Caribbean

Approximately US$4.2

billion under management

IFC Three Businesses Lines

5

Senior Debt

& Equivalents

Equity

Mezzanine /

Quasi Equity

Senior Debt (corporate finance, project finance)

Fixed/floating rates, in US$ or local currency

Commercial rates, repayment tailored to project/company needs

Long maturities: 8-12 years, appropriate grace periods

Range of security packages suited to project/country

Mobilization of funds from other lenders and investors, through

cofinancings, syndications, parallel lending.

Subordinated loans

Income participating loans

Convertibles

Other hybrid instruments

Corporate and JV

Typically 5-20% shareholding

Long-term investor, typically 6-8 year holding period

Not just financial investor, adding to shareholder value

Independent board member appointed by IFC provides Value added to the Company

Financial Products – From Equity to Debt

6

Global Industry

Expertise IFC’s Global Healthcare Team investment expertise and experience in emerging

markets with in-house health specialists adds value to its clients

Long-term

Competitive

Financing

IFC is a one-stop-shop for financing (equity, debt, structured finance, etc.) depending

on the Project

Longer investment horizon and less cyclical than most financial investors

Country Risk

Mitigation Reduced Political risk through Government Relations, Neutral broker Role, Preferred

Creditor Status

Withholding Tax Benefit

Regional

Knowledge Global and local presence in more than 100 countries with increase focus on local

presence.

Environmental &

Social Risk

Management

Advice on Environmental and Social Best Practices

Local Consultation and Disclosure

Corporate Governance

Capital

Mobilization IFC can mobilize funding: debt from commercial banks and other DFIs (syndications),

equity from investors (AMC), etc.

How IFC Differs From Other Partners

7

Agenda

8

▪How Can IFC support the Health Care Sector?

(products, value added)

▪IFC’s Experience in the Healthcare Sector

▪How can IFC work with the Health Care Sector?

▪Examples of Projects

IFC in Healthcare - Over US$2 billion Invested in Health

in Emerging Markets

Largest multilateral investor in the private health sector in Emerging Markets

Diversified portfolio across health services and life sciences

Large base of experience

In-house specialists

Support for public-private collaboration and investments

Successful long-term partnerships

Ability to work closely with World Bank on regulatory and business environment

Shareholders in over 35 health sector companies worldwide

Sector Highlights (to June 2013)*

Health Commitments US$2.75 billion

Health Services Commitments US$1.8 billion

Life Sciences Commitments US$643 million

# of companies 57

# of countries 38

9

IFC in Healthcare – US$2.75 billion invested in 38

countries around the world

10

Total Healthcare Commitments to June 2013* (US$ million)

Active portfolio: US$442.70

million (29% of health

portfolio)

IFC works with clients in

pharmaceuticals, biotech,

vaccines, medical technology,

pharmacy/distribution, and

personal care/cosmetics

Active Portfolio: US$1,089.69

million (71% of health

portfolio) investments

IFC works with a variety of

clients, including hospitals,

diagnostic chains, and HMOs

17.2 million patients treated

annually in health services

Health

Services

Life Sciences

* Does not include $15m in global transactions

349.7407.7 389.9 368.3

341.7

154.4

167.0

152.0

69.6

178.8

148.3

10.8

0

100

200

300

400

500

600

MENA Latin America Europe andCentral Asia

South Asia East Asia Sub-SaharanAfrica

Life Sciences Health Services

Agenda

11

▪How Can IFC support the Health Care Sector?

(products, value added)

▪IFC’s Experience in the Healthcare Sector

▪How can IFC work with the Health Care Sector?

▪ Examples of Projects

PROVIDERS

Hospitals/

Clinics

Outpatient

Physicians

Laboratories

Diagnostic

Centers

FINANCIAL

INTERMEDIARIES

HMOs

Insurance

SUPPORT SERVICE

PROVIDERS

Technology

Services

CROs

Healthcare

Logistics

Providers

DISTRIBUTION

CHANNELS

Distributors

Wholesalers

Pharmacies

SUPPLIERS OF

PROVIDERS

Medical Devices

Medical

Equipment

Drugs (Finished

formulations,

vaccines, etc)

Other Healthcare

supplies

IFC works closely with a wide range of parties to provide

financing solutions across the health industry.

Investment Possibilities Across Health Services

and Life Sciences

12

IFC works with a developed network of over 200 client and partner

financial institutions to provide health-related solutions.

Supplier

Finance

Pharma

Medical

Equipment

Consumables

Reach smaller

producers in

emerging

markets

Distributor

Finance

Medical

Equipment

Bring machinery

and technology

to emerging

markets

Risk-Sharing/

Credit Facilities

Health SMEs

Climate Change

Encourage

banks to cover

new sectors

Encourage

trade flows

Medical

Equipment

Pharma

Consumables

Trade Finance

IFC Healthcare – Wholesaling Initiatives

13

• IFC is a patient investor

that partners with young

companies to develop new

markets

• IFC brings expertise,

access to finance and

access to its unrivaled

network

• IFC’s involvement sends a

strong signal of support

and boosts credibility

• IFC assists clients through

transformations to reach

the next level in:

• Scale

• Corporate governance

• Regional expansion

• Internal processes and

social & environmental

and insurance standards

• IFC works with industry

leaders to provide support

in:

• Consolidating regional

networks

• Exploring expansion

opportunities further

afield

• Realizing successful

fundraising in

international financial

markets

Growth &

Transformation Early Development

Com

pany

Develo

pm

ent

IFC

reso

urc

es

IFC Investment at different stages of a Company’s

Development:

Mature Market

Leadership

14

Growth and transformation Early development

Mature market leadership

• Acibadem first became an IFC client with only 2-3 hospitals.

• Its eventual growth and successful sale to Abraaj was aided by IFC’s

presence A leading private healthcare

provider in Istanbul, Turkey

• IFC became the first outside investor in this family owned business and

has provided guidance on corporate governance.

• IFC’s long-term debt and equity package and strategic knowledge share is

supporting the company’s regional acquisition plan A leading pharmaceutical

manufacturer in Colombia

• IFC supported Alkaloid through an Advisory Project associated with its

investment to become the first in the region to achieve EU GMP

• Alkaloid has been able to leverage its EU GMP certification to become a

leading export focused producer in the region. Leading regional Balkan generic

producer and distributor

Growth &

Transformation Early Development Mature Market

Leadership

IFC Investment at different stages of a Company’s

Development:

15

Growth and transformation Early development

Mature market leadership

One of the largest private

healthcare providers in India

• IFC purchased equity of US$11m and preferred shares of US$56m

• IFC advised MHI on operational best practices that would improve the

company’s ability to become one of India’s leading health care providers

• IFC’s investment demonstrated support for Life’s emerging markets

expansion strategy

• IFC supports Life’s expansion into new markets through financing as well

as knowledge of emerging markets

The second largest private

healthcare group in South Africa

• IFC has been a long-term partner of Hikma in debt and equity since 1987

• The Company credits IFC with helping it to grow from a small Jordanian

generics company to expanding its presence across MENA, US and

Europe, achieving US FDA approvals and listing on the LSE in 2005

Leading prescription-only generics

company in MENA

• IFC assisted a medium-sized company to transform itself from a bulk

drug into an integrated company with R&D and formulation capacity.

• Today the company has a diverse portfolio leveraging cost advantages

from its diverse portfolio. Vertically integrated Indian

producer

Growth &

Transformation Early Development

Mature Market

Leadership

IFC Investment at different stages of a Company’s

Development:

16

How Can IFC work with Public Private Schemes?

• IFC’s counter part is always a Private Company or

Investment Vehicle

• The Private Company provides products, services or

solutions to the Public sector in the form of a public-

private partnership (APP, PPS, “Servicios Subrogados”,

etc)

• IFC can finance the Company or an SPV

In the case of an SPV, a waterfall mechanism is

pre-agreed, in which debt service is done after WK

needs are financed.

Project’s assets and agreements are placed in the

SPV until full repayment.

How can IFC work with Public Private Schemes?

SPV IFC

Financing

Debt Service

LT Contract

for WK,

Infrastructure,

etc.

Products Services Solutions

Service

Agreement

PUBLIC INTITUTION

COMPANY

Agenda

19

▪How Can IFC support the Health Care Sector?

(products, value added)

▪IFC’s Experience in the Healthcare Sector

▪How can IFC work with the Sector in general

and with public-private schemes?

▪ Examples of Projects

Representative Transactions in Health Services

20

Equity Debt and Equity Equity/Quasi-Equity Quasi-Equity Investment and

Advisory

US$4m Equity

2007

US$12m Senior Debt

US$29m Senior Debt

US$2m Quasi-Equity

2000, 2008

US$20m Equity

US$15m Senior Debt

US$10m Senior Debt

2008

US$10m Senior Debt

US$1m Quasi-Equity

2008

US$8m Senior Debt

Advisory

2008

US$8m Senior Debt

Advisory

2006

US$50m Senior Debt and

Equity

2013

US$4m Equity

2013

UST – Univ. of Science

and Technology Asian Hospital

Dar Al Fouad Hospital

Magrabi Hospitals AAR Healthcare Concord Aier

Hospital Metropolitano

US$93m Equity

2010

Life Healthcare

Sub-Saharan

Africa

Egypt

US$15m Equity

US$15m Debt

2012

MNT

Turkey

Saudi Arabia /

MENA

US$37m Senior Debt

US$55m Equity and

Quasi-Equity

2007, 2009

Saudi German Hospital Grp

MENA

East Africa

Philippines

China

Nicaragua

Yemen

China

US$45m Equity

US$55m Debt

2013

Fortis

India

US$40m Senior Debt

US$10m Quasi-Equity

2013

Alliar

Brazil

US$48m Equity

2012

IHH Healthcare

Asia

US$10m Debt

Green Building Advisory

2013

Hospitaria

Mexico

Debt Debt Debt and Equity Equity/Quasi-Equity Investment and

Advisory

US$20m Debt

2007

US$4.5m Equity

2005

US$8m Debt

2005

US$33.7m Debt and Equity

2009

US$88.3m Debt

2006, 2012

US$35m Quasi-equity

2000

US$45m Debt and Equity

2007

US$50m Debt

US$80m B-Loan

2012

Weigao

Fosun Pharma

Abolmed Orchid

Hikal

Tecnoquimicas

Bharat Biotech

Pliva Alkaloid

US$25m Equity and Debt

US$1m Cleaner

Production Loan

2007, 2009, 2011

US$7m Debt and Equity

Advisory

2007

Bio-Extracts EPZ

Hikma

US$164.3m Debt and Equity

Advisory

1987, 1989, 1993, 1994,

2003, 2011

US$9m Quasi-Equity

Advisory

1999

US$30m Quasi-equity

2001

Bosnalijek

US$14m Debt and Equity

1999 , 2005

US$3.5m Debt

2006

Biocon Group

Belcorp

Granules

Representative Transactions in Life Sciences

21

China

China

Russia

Latin

America

India

Ukraine

Colombia Croatia Macedonia

India India MENA

Bosnia-Herzegovina India Kenya