The Tribune

• Eyeing potential Cleveland Clinic ‘flagship’

• Canadian investment to unlock expansion

• ‘Beyond Bahamas borders’ by 2025 target

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Doctors Hospital’s president last night said a $13.5m Canadian investment will accelerate the launch of a Grand Bahama care facility “comparable to our New Providence” assets by 2022. 

Dr Charles Diggiss told Tribune Business that the equity injection by Toronto-based Fairfax Financial Holdings will enable the BISX-listed healthcare provider to quicken an expansion pace that will take it “beyond the borders of The Bahamas” and into the wider Caribbean by 2025.

Fairfax Financial, whose main interests lie in insurance and reinsurance investments stretching around the world, is acquiring two million Doctors Hospital shares at $6.75 per share - a price just below Friday’s close of $6.85, but likely equal to the prevailing market price when the deal was agreed.

Doctors Hospital, in a statement yesterday, said the deal - which is taking the form of a private placement - will see Fairfax Financial acquire a 16.7 percent stake in the healthcare provider, but the Toronto Stock Exchange (TSE) listed investment house will not be seeking a Board seat in return.

Dr Diggiss, who voiced optimism that the necessary government and Securities Commission approvals could be in place by month’s end, told this newspaper that the Fairfax Financial investment will enable Doctors Hospital to quicken the pace at which its vision for Bahamian healthcare’s future is rolled-out.

He explained that the additional equity capital will help foster its plans to partner with existing medical providers on major Family Islands, providing them with access to services such as imaging, diagnostics, laboratory and pharmacy.

And Fairfax Financial’s involvement will also speed up Doctors Hospital’s plans to deliver “virtual, remote and portable services” throughout The Bahamas, bringing healthcare to persons where they reside and increasing access to medical treatments.

Dr Diggiss, who has become Doctors Hospital’s largest shareholder after progressively acquiring holdings held by Barry Rassin and his family, told shareholders to brace for a stock price that will be “propelled north” by the company’s sudden access to a substantial, low-cost financing source.

Describing the move as “a big deal for The Bahamas”, he added that development of a private “in-patient” care facility in Grand Bahama was one of “two spaces” where Doctors Hospital was seeking to put the Fairfax Financial investment to use.

While declining to provide much detail on this project, Dr Diggiss said six months of planning work had already been performed on what could become the “flagship” facility for its recently-unveiled partnership with the Cleveland Clinic.

“It will be at least comparable to what Doctors Hospital in New Providence is, but we’re looking at an ability to expand it and consideration given, due to our relationship with the Cleveland Clinic, whether that becomes the flagship Doctors Hospital/Cleveland Clinic facility in Grand Bahama,” he told this newspaper, adding that a 2022 opening date is being eyed.

Dr Diggiss said Fairfax Financial’s additional cash will also allow Doctors Hospital to execute on plans to partner with medical providers on the major Family Islands, with Abaco, Exuma and Eleuthera targeted initially.

Doctors Hospital will “do the heavy lifting” by providing them and their patients with access to expanded testing and care services, while it also focuses on deepening the provision of virtual, remote and portable services.

“We look at virtual, and we look at building up our tele-health capacity,” Dr Diggiss told Tribune Business. “We look at remote, putting in a kiosk with a digital touch screen in remote locations so persons can access us with questions and set up appointments in remote population centres in the Family Islands.”

He added that this could extend to “manned portable stations or manned remote stations”, and said: “When we talk about mobile we’re talking about the full spectrum of home healthcare; home rehabilitation, home nursing. We’re going to build out that service since we realise more of our patients are kept at home to minimise costs, so we will come to them.”

Dr Diggiss said Doctor’s Hospital’s mobile services have already been at work with COVID-19 testing, and he added: “We know this is what the future of healthcare delivery looks like. That mobile drive through platform, we will build that up a little more.” The Doctor’s Hospital chief disclosed that Fairfax Financial’s investment came about over an 18-month process as a result of his relationship with the Canadian investment house’s chairman and chief executive, Prem Watsa, and the two sides understanding “how well aligned both of our visions were”.

“I can only put it in big letters: Huge,” Dr Diggiss said of the deal’s likely impact, since it will allow Doctors Hospital to focus on Caribbean expansion opportunities over the next three years. “We expect by 2025 that we’re beyond The Bahamas’ borders, yes,” he told Tribune Business.

“This is where a lot of the interest of Fairfax would sit in taking this model throughout the Caribbean. You can imagine it would be in the English-speaking Caribbean, the main locations, partnering with private providers on the ground in those locations.”

While Doctors Hospital’s more than 1,000 existing Bahamian shareholders will be diluted by the issuance of two million ordinary shares to Fairfax Financial, taking the company’s listed shares to just under 12m, investment analysts said they were more likely to be interested in the potential for added value.

“If if gives you more liquidity in the stock, and something exists that adds value, I don’t think they’ll have a problem with that. They are still deep in minority ownership for that stock. It’s a plus,” one said, speaking on condition of anonymity.

Another added: “That’s very good support for the market price. Institutional support for Doctors Hospital is welcome. I think it’s a really nice transaction for those guys to have someone like Fairfax interested. It adds credibility to their business and value to the stock.”

The deal requires approval from the likes of the Government’s National Economic Council (NEC) and Securities Commission, and Dr Diggiss said: “I’m not going to predict how long it will take, but I see this as a March consummation. I see this as 30 days, but don’t want to put a timeframe on it.”

Adding that Doctors Hospital’s share price will go “only north from here”, he continued: “In terms of value to shareholders we anticipate there’s every reason to see the share price propelled north, and they [investors] should be more than pleased with the amount of dividend returns.”

Doctors Hospital’s Board has already approved a transaction that will provide growth capital, and not be used to pay down existing debt or fund planned capital works. Both of these will be covered from existing cash flow.

“Fairfax is clearly impressed with the leadership, vision and future growth possibilities of Doctors Hospital,” Felix Stubbs, its chairman, said in a statement. “I was especially reassured by Fairfax’s application of its business and life values in this decision.

“Fairfax is investing in Bahamian leadership without expecting to be actively involved in the strategic or day-to-day operations of Doctors Hospital.” Dennis Deveaux, the hospital’s chief financial officer, said: “The cash injection from this transaction presents a new source of debt-free funding which will provide for a robust expansion into service areas where there is clear under-capacity nationally.”

And Fairfax’s Mr Watsa said: “We are very excited about the possibilities emanating from Dr Diggiss’ vision. We admire his business acumen and we were impressed by his initiative to create synergies with the Cleveland Clinic.

“Fairfax’s formula for investing is making fair and friendly deals and, in this case, we seek to place the resources, influence and support of our global organisation firmly behind Doctor’s Hospital’s vision as represented in its president, Dr Charles Diggiss.”

Doctors Hospital has already hired an additional 250 staff for the COVID-19 testing roll-out, and Dr Diggiss said this number could even yet “double” to 500 “engagements” in addition to its existing 500 staff. He added that the Government can “piggyback” on the testing infrastructure it has put in place by using it for the vaccination roll-out.