Macquarie Group storms into Cura Group as Medibank backer

Final bids for day hospital provider Cura Group are due in December. Picture: iStock

Australian listed financial powerhouse Macquarie Group has emerged in the final stages of the $500m-plus contest for the country’s largest day hospital provider Cura Group.

Macquarie is understood to be partnering with Medibank, which is one of three shortlisted bidders in the race.

The others are the international private equity firms Partners Group and Intermediate Capital Group.

It is understood that Macquarie is attracted to the opportunity due to the infrastructure-like qualities that day hospital operators like Cura Group possess.

Queensland Investment Corporation, another infrastructure investor, had earlier waded into the space with its majority interest in Nexus Day Hospitals, a significant industry player in Australia which purchased the Healius day surgery division Montserrat Day Hospitals for about $140m last year.

As reported by DataRoom on November 5, investment bank Citi shortlisted three parties for the Cura Group sale process, with Ramsay Health Care, Pacific Equity Partners and Morgan Stanley Infrastructure Partners out of the contest.

Binding offers are due early next month.

Cura, owned by Fresenius, is understood to generate about $42m of annual earnings before interest, tax, depreciation and amortisation from its 19 assets and has been identified as non-core.

The German company purchased a 70 per cent stake in the nation’s largest day hospital owner in 2017 from Intermediate Capital for a price believed to value it at more than $400m.

Medibank is Australia’s largest private health insurer with a market share of about 27 per cent, ahead of Bupa.

In 2020, Medibank purchased a 49 per cent stake in the East Sydney hospital in Woolloomooloo.

Last year it formed a joint venture with more than 40 specialist doctors to develop a short-stay surgical facility in Kew, Melbourne.

Medibank chief executive David Koczkar has previously played up Medibank’s strategy of investing in short-stay hospitals, primary healthcare and tele-health, with the operations contributing strongly to Medibank’s earnings and improving healthcare outcomes across the board, including its own customers.

At the Macquarie conference in May, he highlighted the synergies for its core health insurance business, with other benefits including a diversification of its earnings and the long-term reduction in preventable claims.