Caribbean Health Systems Limited (CHS) has become the new owner of Medical Associates Limited and intends to expand the 64-year-old entity.

The takeover bid transaction was completed on Monday for the 50-bed private hospital located at 18 Tangerine Place. CHS is owned by Novamed Inc, FirstRock Real Estate Investments Limited (FRRE) and Health Ventures Limited. Medical Associates Limited’s hospital facility is listed on Michael Lee-Chin’s Portland Holdings website as an investment.

The principals of CHS include Dr David Walcott, Ryan Reid, Douglas Halsall, Dr Michael Banbury, Kevin Donaldson, and Kirk-Anthony Hamilton. Dr Banbury resigned from Medical Associates as its CEO last May after serving for more than eight years while Dr Walcott and Reid are the principals for Novamed and FirstRock Group.

“I am pleased to be returning to Medical Associates as chairman. Apart from being situated on very prime real estate, the hospital has tremendous potential for significant growth and expansion, and I am confident that the CHS team will make this a reality,” said FirstRock Group co-founder Banbury in a press release.

In July 2022, FirstRock noted in a disclosure on the Jamaica Stock Exchange (JSE) that it was part of a consortium seeking to acquire the operating entity and property where Medical Associates Hospital is located. The latest JSE notice stated that the transaction was completed and represented a strategic acquisition of prime real estate and an operating asset. FRRE lent $60 million via a promissory note to Medical Associates Limited at an interest rate of 11 per cent per annum in 2020 with the note set to mature in October.

For the first nine months of 2022, FirstRock’s consolidated asset base grew by 35 per cent to US$60.72 million ($9.23 billion). Its equity base closed the period at US$37.44 million. This translates to a book value of US$0.13 which reflects the value of the business’s equity on a per share basis.

FRRE’s stock prices closed at US$0.06 and $11.70 on Monday. The company made its last purchase under its share buy-back programme on January 26.

Although the ownership stake in CHS was not disclosed, FRRE’s 2022 audited financials are expected to be published today as per JSE rules. A subsequent event notice or the interest in investments would be mentioned in the notes. FRRE has five subsidiaries under its group structure.

CHS was formed as a St Lucian international business company (IBC) on June 10, 2022, as per pinnaclestlucia.com. FRRE and Novamed are St Lucian IBC’s while Health Ventures is a Jamaican company. FirstRock’s affiliate FR Century Holdings Limited recently acquired a majority interest in Century 21 Heave Ho Properties Limited.

The acquisition of Medical Associates by Novamed Properties Limited follows the latter’s US$40-million acquisition of the Knutsford Court Hotel last July. The four-acre property, which has since been renamed The Summit, is located in the same strategic vicinity as Medical Associates. The space is to be transformed into a ‘lifestyle and business campus’ and will become Jamaica’s first smart commercial centre. CHS shareholders noted that they intend to transform private health care in Jamaica.

The transaction was structured by Donaldson’s Roots Financial Group Limited, with law firm Patterson Mair Hamilton acting as legal advisors. Commenting on the transformation of the hospital, he told Jamaica Observer, “Everything will be done in a systematic way to ensure that there is no dislocation from the existing business. Going in we’ll evaluate [and] understand the different needs and we’re going to implement…It’s going to be a 24-month project, I can imagine, to transform an the entire entity, but changes will be noticeable in the first three months.”

Medical Associates was founded by Dr JT Burrowes in 1959 and incorporated as a legal entity in September 1960.

According to Dr Walcott, who prepares to become the managing director of Medical Associates, “We see great potential for health care in Jamaica and plan to make Medical Associates a national icon of quality health care. We are grateful to be the new owners of this operating asset and hope to prudently steward the organisation towards greater heights of performance, purpose and patient-centred care.”