Fakeeh Care acquires Diagnostics Elite at 45% discount to fair value: Chairman

Mazen Fakeeh, President and Chairman of the Board of Fakeeh Care Group

Mazen Fakeeh, President and Chairman of the Board of Fakeeh Care Group, stated that the acquisition price of Diagnostics Elite Co. reflects a discount ranging between 40% and 45% compared to the fair valuation.

Fakeeh added in an interview with Argaam that the group relied on an independent financial advisor (IFA) to determine the fair value (FV) of the acquired stake; it was estimated within a range of SAR 114–125 million as of Sept. 30, 2025, and not based on historical profits.

The SAR 70 million transaction was executed at cost price without any profit for the seller, with protective clauses included for Fakeeh Care in case growth falls short of expectations.

He noted that Diagnostics Elite holds an estimated 23% market share in Saudi Arabia and 6% at the GCC front. Revenue growth is mainly linked to expanding long-term operation and management contracts, launching new sites, and increasing capacity, as well as mobile imaging and remote reading services.

Fakeeh explained that the parent company (Diagnostics Elite) records profits and grows its business through remote imaging, while the subsidiary specializing in operations and management (Premier Imaging Medical Centers - PIMC) reports temporary losses due to scale-building and expansion.

The company is among the leading providers of remote radiology services and operates radiology departments in hospitals and medical centers through its subsidiary, PIMC. It also offers radiation safety and mobile imaging services, relying on an internally developed AI-supported Picture Archiving and Communication System (PACS), the first Saudi product of its kind.

Diagnostics Elite plans to expand to 16 operational and management (O&M) sites within the Kingdom, with six currently operating in Jeddah, Makkah, Madinah, Khamis Mushait, and Yanbu, and a commitment to launch 10 additional sites. This expansion, including investment in diagnostic device infrastructure, will be financed using over 75% of the total proceeds previously contributed by the seller.

The expansion also includes a strategic partnership with Nahdi Care to provide computed tomography (CT) and magnetic resonance imaging (MRI) imaging services using advanced devices and AI-supported smart communication applications, ensuring high diagnostic quality in line with international standards.

Regarding financing, Fakeeh stated that the transaction is fully funded from the company’s own resources and free cash flows, without relying on bank facilities, and will not affect debt levels, clarifying that the group remains in a net cash position.

As for the financial impact, he explained that it will be limited in the near term due to operating and management expenses, but contributions will gradually increase as additional sites become operational, alongside income from mobile imaging and remote reading services.

“We expect gradual growth and a positive contribution to margins over time, noting that margins for this activity are higher than the group’s average,” the Chairman said.

The deal provides shareholders of Fakeeh with a majority stake in a growing company at a price below fair value, enhancing the potential to maximize returns and profitability in the medium to long term, with Diagnostics Elite’s future valuation expected to support the group’s financial results.