Hospitals may be sold as Healthe Care regroups

Last year, Healthe Care embarked on an $800m-odd refinancing with assistance from investment bank Goldman Sachs. Picture iStock

Australia’s third-largest private hospital operator Healthe Care is believed to be in the process of restructuring and many believe it will sell assets.

It is understood that Chinese owner Luye Medical is in the process of separating the rehabilitation and mental health unit from its acute care operations.

The understanding is that Healthe Care wants to retain its mental health operations, but the private hospital services may come onto the market.

Heathcare assets are in strong demand by private equity firms due to their earnings growth profile and defensive nature.

Healthe Care may have already been fielding interest from prospective buyers.

Healthe Care was established in 2005 by Ben Thyne, who now runs Evolution Healthcare.

It now has 34 hospitals and healthcare facilities across five states and four capital cities, as well as major regional areas in Australia and one in New Zealand, with 2500 beds and 7000 staff.

Luye purchased Healthe Care from Archer Capital in 2015 for $938m.

It beat other private equity firms including Baring Private Equity and Bain Capital in the contest.

Last year, Healthe Care embarked on an $800m-odd refinancing with assistance from investment bank Goldman Sachs.

Market experts believe that the private hospital business, which does not include any real estate assets, could be worth about $200m.

Buyers would probably include private equity firms, while the listed health insurer Medibank Private can’t be ruled out after it acquired a stake in East Sydney Private Hospital in Woolloomooloo for about $40m, as revealed by DataRoom in July.

It comes as Healius this week settles its deal to sell its medical centres division to BGH Capital for $500m.