Mercury Capital hires Stanton Road Partners for Tamaki Health sale

Tamaki Health has 50 clinics across the Tasman and expected to be worth over $NZ400m. Picture: iStock

New Zealand’s largest privately owned healthcare group Tamaki Health has been placed up for sale by its private equity owner, with Stanton Road Partners hired to divest the business.

Sydney-based Mercury Capital, run by former Goldman Sachs New Zealand boss Clark Perkins, owns the business that is expected to be worth over $NZ400m.

The business was previously called Nirvana Health Group and offers primary health care services.

It has grown from a standalone clinic in south Auckland founded by Kantilal and Ranjna Patel in the 1970s to 50 clinics nationwide, operating under the Local Doctors and White Cross Urgent Care brands with over 1000 staff.

In the south Auckland region of Counties Manukau, Tamaki Health is the largest primary healthcare provider to Pacific Islanders and is also a large provider of healthcare services to the Maori community.

It offers affordable GP consultations, online doctor services and urgent care through the White Cross brand.

Private equity firms are expected to be the most likely buyers of the business that generates between $40m and $50m of annual earnings before interest, tax, depreciation and amortisation.

The business was on the market in 2021 and Pacific Equity Partners and Crescent Capital were believed to be among the parties taking a look.

Sydney-based PEP owns about a dozen Australian hospitals and some day centres within the Healthe Care business that it bought from China’s Luye in 2021 for more than $400m, and is comfortable with the New Zealand market.

Rival Crescent Capital was the underbidder in the contest and also invests across the Tasman.

The New Zealand government announced in March that it would provide an extra $NZ95m of funding annually from July for general practices to improve access to their services, provide more specialist treatment to patients and increase delivery against a set of key health targets.

The funding was to incentivise general practices to provide more services, and improve access to primary care appointments for New Zealanders and reduce cost growth in the hospital sector.

This was in addition to the capitation funding (a population-based funding formula) increase that general practice receives annually.

Around 95 per cent of New Zealanders are enrolled with a general practice, and GP teams, including urgent care teams, deliver 24 million ‘patient encounters’ a year, compared with 1.4 million emergency department visits and one million outpatient visits a year.

Stanton Road Partners, headed up by former Morgan Stanley banker Peter Brownie is also selling UP Education, which offers private tertiary education through Australia and New Zealand.

The business is owned by PEP and educated about 39,000 students across demand driven subject verticals that address skill shortages and deliver employment outcomes.

It operates through a network of 64 campuses and offers online education.