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Turkey: Riding The Tiger

Murat Dayanıklı, MD, MPH, MBA

Healthcare Europa Conference

London, March 15, 2012

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Why Turkey?

Turkey is the perfect investment environment for so many reasons.

Political stability

Successful economy

Favorable demographics

Diligent and dedicated labor force

Liberal investment climate

Well developed infrastructure

Geographic location

Positive international relations

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Why Turkish Healthcare?

Demand for healthcare services has been increasing at a steady pace.

GDP and total disposable income

% of GDP spent on healthcare

Population growth

Ageing

Non-communicable diseases

Public insurance coverage and governmental spending

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Private Investors Lured

Due to such indicators, the number of acute private healthcare providers has significantly increased during the past years.

2002 2006 2007 2008 2009 2010

Private 271 331 365 400 450 489 +10.3%Other 61 49 48 46 46 45 -2.1%University 50 56 56 57 59 62 +2.6%MoH 774 767 848 847 834 843 +2.4%Total 1.156 1.203 1.317 1.350 1.389 1.439 +4.6%

2002 2006 2007 2008 2009 2010

Private 12 15 17 21 25 28 +17.7%Other 18 18 18 18 18 17 -1.0%University 26 31 31 30 30 35 +2.9%MoH 103 119 120 119 122 120 +0.1%Total 160 183 186 188 196 200 +2.3%

CAGR 2006-2010

Number of Hospitals

Number of Beds (000)

CAGR 2006-2010

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Restrictions May Apply!

To control the penetration of private providers and demand, the Government has introduced restrictive measures.

Limits on issuing licenses for new private hospitals

Caps on out-of-pocket payments received from SGK patients

Fixing SGK prices

Limiting the number of doctors employed at private hospitals

Preventive medicine measures

Full-time employment act for physicians

PPPs

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Recipe for Sustainability

Private providers have established different strategies to respond to the everchanging environment.

Organizational effectiveness

Performance improvement

Growth

Mergers and acquisitions

International market penetration

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Growth is Excitement

Immature, highly fragmented private provider market with large room for growth potential is ripe for consolidation.

Providers# of

Beds

Medical Park 17 2.566 9% 151Acıbadem 14 1.914 7% 137Universal 14 1.463 5% 105Medicana 7 845 3% 121Memorial 6 815 3% 136Şafak & Arkaz 6 552 2% 92Medline 6 507 2% 85

Subtotal 70 8.662 31% 124

Other 419 19.401 69% 46

Total 489 28.063 100% 57

# of Hospitals

Bed Share

Beds per Hospital

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Growth is Excitement

Transactions mostly with PE funds in the previous years have enabled major players to increase their size and consolidate the market.

Providers Investor

Medical Park 40% CarlyleAcıbadem 75% IHCUniversal 26% ADMMemorial 40% Argus, QFIBŞafak & Arkaz 51% TurkvenKent 65% MidEuropaDünya Göz 30% NBKİstanbul Cerrahi 100% Mineks, N/A

Shares Acq'd

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Growth is Excitement

However, the landscape limits the number of players that may be of interest to financial or strategic investors from abroad.

Size

Good corporate governance

Management platform

Financial performance

Off the book accounts

Business technology

Control rights

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Growth is Excitement

No matter what, in addition to ongoing first round transactions we will see second and third round M&A activities as well as IPOs.

Government loosens the tight control

Room exists for larger networks

Stop-loss arrangements on their way

Mergers will occur

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Growth is Excitement

International market penetration come in many forms to also grow the business.

Medical tourism

Education and consulting

Hospital management

Direct (OpCo) investment

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Growth is Excitement

Among all surrounding regions, MENA is the most promising area for Turkish private providers.

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Growth is Excitement

Our strengths enable us to outshine competitors around the region.

Strong & dynamic management culture

In depth knowhow at modern hospital management

Recruitment/retainment of high caliber professionals in every field of specialty

Ability to render all clinical services

World-class architecture, engineering, technology and equipment

Comfort with the culture, religion, values and geographical proximity

Best value proposition

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For questions you may have, please do not hesitate to contact us.

Medforum Healthcare ServicesEbulula Mardin Caddesi No:16Maya Meridyen İş Merkezi Kat:2Akatlar 34355 Beşiktaş İstanbul TurkeyT: +90 212 283 86 86E: info@medforum.com.tr

Questions?