Business

The man headhunted by Anton Rupert who created a hospital giant 

Almost no one gets a personal invitation from Anton Rupert to join the Rembrandt Group. Dr Edwin Hertzog did so in 1982, and three years later, Mediclinic was listed on the JSE with four hospitals already in operation. 

Hertzog spent the next three decades of his life building Mediclinic into an international private healthcare giant worth R85 billion. 

Based in Stellebosch, the company has operations in South Africa, Namibia, Switzerland, and the United Arab Emirates (UAE). 

Mediclinic employs 37,000 people and cares for more than 840,000 patients a year. 

One of the many successful businessmen to come out of Stellenbosch University, Hertzog, was surrounded by brilliant minds. 

The younger Hertzog spent his years at Stellenbosch in the Eendrag residence, living alongside Capitec-founder Michiel Le Roux and PSG co-founder Chris Otto.

He was always interested in medicine and completed his qualification to become an anaesthetist, which he practised for three years. 

His father, Dirk Hertzog, was Anton Rupert’s partner in founding the Rembrandt Group, which would later become Remgro. 

The Rembrandt Group, founded in 1948, had become South Africa’s premier investment holding company and a blue-chip JSE stock by the 1980s. 

In the 1970s, it gradually expanded its interests outside of tobacco, wine, and spirits with investments in financial services, mining, and packaging. The next step was medical services. 

Hertzog received a personal invitation from Anton Rupert to join the Rembrandt Group, which took him completely by surprise. 

He maintains that he was never looking for or expecting an offer despite his father being Rupert’s business partner. 

After accepting the offer to join Rembrandt, Hertzog was given three options: work in the company’s burgeoning financial services division, take on technical work, or become a marketer. 

Strangely, he chose marketing. However, he would not stay in the field for long as opportunities came knocking. 

Making the Mediclinic monster

A group of medical specialists approached Rembrandt in 1982, asking if the company would consider opening a new private hospital with high-quality facilities. 

There were already a handful of private healthcare facilities in South Africa at the time, but most patients still relied on medical schools’ training hospitals, such as Wits’ Donny Gordon, for specialist procedures. 

Hertzog had previously conducted an in-depth study into launching his own specialist day surgery theatres at a private practice but failed to acquire funding. 

Based on this study, Rembrandt decided to commission Hertzog to study the feasibility of launching a new private hospital in South Africa. 

He submitted a report based on opening a hospital in the Cape Town area, which Rembrandt then asked him to expand to cover the entire country. 

Hertzog found clear demand for such hospitals, but as Ebbe Dommisse’s Fortunes shows, he made clear that they would be very expensive and probably not seriously profitable. 

After presenting this study to Rembrandt’s executive committee with the help of financial manager Thys Visser, a 150-bed pilot project was launched in Cape Town. Hertzog was appointed Mediclinic CEO. 

After the successful pilot, Mediclinic bought up existing hospitals in Cape Town and Johannesburg and began providing healthcare to patients. 

In its third year, Mediclinic broke even for the first time. In its fourth, it did better, and in its fifth, it exceeded the first five years’ profit projections in their entirety.

With four hospitals under its belt, the company began building its own from scratch. To do this, it needed substantial capital, which could only be found in one place – the JSE. 

In 1986, the company was listed on the stock exchange and opened the first facility built by Mediclinic in Panorama, Cape Town. 

JSE

From listing to delisting

Armed with capital from investors backing the latest Rupert-owned company, Mediclinic grew rapidly and even began designing and manufacturing its own medical equipment. 

Within six years of its launch, Mediclinic grew to more than eight hospitals, with 1,600 beds and 2,600 employees. 

The company soon looked outside of South Africa’s borders for growth, buying up Medicor in 1996 and taking over its 11 hospitals, two of which were in Namibia. In one transaction, Mediclinic had doubled its footprint. 

The following year, it added four more hospitals with the takeover of Hydromed. The company’s acquisition spree was not over. In 1998, it bought Auckland Health, adding another 11 hospitals to the group. 

Mediclinic then had its eye on Dubai as the Middle East became the new hub for wealthy individuals and was opening the door for international investment. 

After buying a stake in Emirates Healthcare, Medcilinic became part of the largest private hospital group in the UAE. 

Seeing early signs of success from its foreign investment, the company then bought Hirslanden in Switzerland and acquired a controlling stake in Emirates Healthcare. 

In 2015, the company went truly global and bought a stake in the UK’s Spire Healthcare. A listing on the London Stock Exchange enabled it to conduct a reverse takeover of Al Noor Hospital Group. 

The company’s buying spree slowed as it became a mature, independent healthcare operator around the world. 

Its journey went full circle in 2023 when a consortium including Remgro and MSC bought out the company’s independent shareholders and delisted the company from the JSE and London Stock Exchange. 

From 1983 until the present day, Hertzog has been intimately involved in this journey in various roles, including chairman and director of Mediclininc International. 

In August 2012, he retired from his executive position and became non-executive chairman. He is also the non-executive deputy chairman of Remgro and a director at TotalEnergies South Africa. 

Hertzog keeps himself busy despite stepping back from the frontline at Mediclinic. He serves on the Council of Stellenbosch University and has had stints as Chairman of the Hospital Association of South Africa. 

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