Pacific Equity Partners is understood to have won the contest to buy Healthe Care’s acute care hospitals, up for sale by Chinese company Luye.
The offering consists of about 12 acute care hospitals and some Day Centres that have been up for sale through investment bank JPMorgan.
PEP fought off competition for the portfolio from Crescent Capital and Brookfield to win the contest.
Earlier, Ramsay Health Care mulled the acquisition of at least one hospital in the portfolio but as expected, was not in the final mix.
Last month, Ramsay purchased the London-listed Spire Healthcare Group for $3.7bn.
The understanding is that final negotiations are still unfolding on price.
Price expectations for the Healthe Care acute hospitals offering were about $400m, with the portfolio forecast to generate $41m of annual earnings before interest, tax, depreciation and amortisation.
PEP has been working with Macquarie Capital for the acquisition.
It owns the Evolution Healthcare business that consists of a number of regional hospitals based in New Zealand.
PEP purchased Evolution Healthcare in March 2019 for a price thought to be about $300m.
Healthe Care is Australia’s third largest private hospital operator.
Luye Medical bought Healthe Care from Archer Capital in 2015 for $938m and it was established in 2005 by Ben Thynne, who now runs PEP’s Evolution Healthcare.
It has been selling assets to pay down debt owed to Goldman Sachs.
Luye also considered a float of the remaining part of the Healthe Care business, consisting mainly of 25 mental health rehabilitation assets, but shelved the deal when equity investors were not prepared to pay a price that gave the offering an $800m equity value, equating to 19.7 times its net profit.
The understanding is that one of the assets in that portfolio – the Brisbane Waters Private Hospital – has also been sold to PEP in the latest deal.
Healthcare assets remain in strong demand by buyout funds, attracted to the industry’s low risk profile amid a low interest rate environment.
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