Private equity firm Crescent Capital has emerged in the final round of the competition to buy Healthe Care’s acute care hospitals as it locks in cornerstone support this week to list its Australian Clinical Labs business as a company worth $809.3m.
Australian Clinical Labs, which is the country’s third largest pathology provider, is understood to have so far proved popular with investors and Crescent is likely to be positioning itself for its next major windfall in the healthcare space through a Healthe Care acquisition.
Healthe Care’s Chinese owner Luye Medical has shortlisted parties in the contest for Healthe Care’s acute care hospitals in a process run by investment bank JPMorgan and DataRoom understands that Crescent Capital is among the final contenders.
Others are Calvary Health Care, run by the not-for-profit Catholic healthcare organisations The Little Company of Mary, Pacific Equity Partners, advised by Macquarie Capital, and Brookfield, which owns the country’s second largest hospital operator Healthscope.
The other not-for profit outfit backed by the Catholic Church, St John of God Health Care, is out of the contest, say sources.
Sources also believe the Australian-listed Ramsay Care has left the competition, while Australian-listed private health insurer Medibank is not in the final mix.
Price expectations for the business are between $380m and $400m.
On offer are 12 acute care hospitals and a number of day surgeries that are forecast to generate $41m of annual earnings before interest, tax, depreciation and amortisation, compared with $27m for the previous corresponding period.
Crescent is known to have been acquisitive in the healthcare space of late.
It purchased PRP Diagnostic Imaging for $440m last year and was among the suitors considering an acquisition of the Healius medical centres division before it was offloaded to BGH Capital for $500m.
Crescent’s Clinical Labs, floating on the ASX through Goldman Sachs and Bank of America, is a combination of businesses acquired in recent years, including operations from Healthscope and St John of God and its SunDoctors skin cancer treatment business. It services more than 90 hospitals.
Crescent locked in a substantial amount of demand for its Clinical Labs IPO on Tuesday night and the terms were finalised on Wednesday, with the price set at $4 per share and the raise size $408.6m.
Its $806.3m market value equates to 15 times forecasted net profit for the 2021 calendar year.
Meanwhile, while looking to sell Healthe Care’s acute care hospitals, China’s Luye is also attempting to float another 25 Healthe Care assets.
Healthe Care is offloading assets as part of a move to reduce its $800m-odd debt pile, with Goldman Sachs one of its key lenders.
Hong Kong dual listing a possibility for Highfield
Australian-listed potash miner Highfield Resources could be seeking a dual listing in Hong Kong in the medium term.
KKR’s door was ajar for Domain Group
New York-based private equity firm KKR explored a buyout proposal for the $2bn real estate group Domain but baulked in the end.