Fakeeh Care Expects to Close Alfagih Hospital Deal Next Month

Abdo said the company is also evaluating other acquisition targets and greenfield projects, though he declined to name specific opportunities. The group aims to increase its bed count to 2,000 over the next five years from roughly 1,200 currently.

Fakeeh Care shares have risen 18% this year, outperforming the Saudi benchmark index, which is up 6%. The stock trades at about 28 times trailing earnings, a premium to some regional peers, reflecting investor expectations for growth from the Alfagih deal and other expansion plans.

The closing of the Alfagih acquisition would remove a key uncertainty for the stock. Investors have been waiting for the deal to finalize since it was announced in late 2024. Once completed, Fakeeh Care can begin integrating the operations and reporting combined financials, which could trigger analyst upgrades and index fund buying.

Abdo said the integration plan is ready and will focus on standardizing clinical protocols, IT systems, and procurement. He expects the combined entity to achieve cost savings of 5-7% within 18 months.

The company's next catalyst is the second-quarter earnings report, due in August, which will be the first to include any contribution from Alfagih if the deal closes by then. Analysts at Al Rajhi Capital have a buy rating on the stock with a price target of 145 riyals, implying about 15% upside from current levels.

Fakeeh Care's expansion comes as Saudi Arabia's health ministry pushes to increase private sector participation in healthcare delivery from 40% to 65% by 2030. The policy has spurred a wave of hospital mergers and acquisitions, with operators like Dallah Healthcare and Saudi German Hospital also pursuing deals.

For Fakeeh Care, the Alfagih acquisition is a test of its ability to execute and integrate. Success could open the door to larger transactions. A delay or integration hiccup would weigh on the stock, traders said.