Healthe Care Australia in refinancing through Goldman Sachs

Healthe Care Australia has 34 hospitals and healthcare facilities, with 2500 beds and 7000 staff

Australia’s third-largest private hospital group, Healthe Care Australia, is believed to have embarked on a refinancing through Goldman Sachs.

It is understood the healthcare provider sought more than $800m from the investment bank after opting not to pursue an initial public offering in Asia that had been on the agenda.

Chinese hospital operator Luye Medical Group bought Healthe Care Australia in 2015 for $938m. At that time, the group beat other private equity firms in the competition and the price was seen as top dollar.

The business was established in 2005 and now has 34 hospitals and healthcare facilities across five states and four capital cities and major regional areas in Australia and one in New Zealand, with 2500 beds and 7000 staff.

Luye Medical comprises a network of healthcare service facilities across major cities in China, focusing on key therapeutic areas including rehabilitation nursing, plastic surgery, geriatric medicine and dentistry. The business was founded by Ben Thynne, who now runs Evolution Healthcare.

A refinancing of Luye’s Healthe Care comes as other healthcare businesses get set to hit the market.

Citic-CLSA and Stanton Road Partners next year are selling Quadrant Private Equity’s Qscan Radiology business, which is set to fetch about $600m, given it is understood to generate about $60m of earnings before interest, tax, depreciation and amortisation.

However, price aspirations may be higher for the company, with Pittwater Radiology recently selling for 20 times its earnings to Chinese party Hengkang in 2017 and I-Med selling to Permira last year for $1.3bn, equating to 11 times its earnings.

Quadrant invested in Qscan in June 2017, along with North Coast Radiology, reportedly valuing the operations at $200m.

After starting in 2006 with one clinic, Qscan now operates in 21 locations and the group has expanded recently with the acquisition of the rival radiology business Alpenglow Australia.

Advisory firm Jefferies is also selling the software solution provider for medical practitioners, Medical Director, owned by Affinity Equity Partners. Medical Director generates about $30m in annual EBITDA and, given it operates in the highly sought after technology and healthcare space, some expect it could sell for anywhere between 15 times and 20 times its earnings.

Under the spotlight during the Medical Director sales process will be the company’s contract with NHS and how much it will generate for the operation.

Private equity also continues to circle listed healthcare provider Healius, which was subject to a $2bn takeover approach by its major shareholder Jangho at the start of the year.