A sale of PRP Diagnostic Imaging is believed to be back on the agenda, and former Macquarie Group and CLSA investment banker Mark Dorney is said to be running a process for the business.
The business, which has about 30 radiology clinics in NSW, has been put up for sale twice over the past two years.
The healthcare provider was originally owned by doctors, but the bulk of the operation was snapped up by Shanghai-listed Hengkang Medical Group, which was founded by billionaire Que Wenbin.
Hengkang acquired a 70 per cent stake in PRP for $336m in 2017, leaving the doctor shareholders with 30 per cent.
The deal was pitched at the time as a partnership between the doctors and Hengkang to take Australian medical expertise to the rising Chinese middle class.
However, Hengkang Medical last year sold out to various shareholders, including Mr Dorney’s former offsider at Citic-CLSA, Andrew Low, who has also since departed.
Some market analysts believe PRP Diagnostics is a strong performer and may appeal to its larger $800m listed rival, Integral Diagnostics.
Integral Diagnostics would not comment on whether it was an interested buyer.
The thinking is that the business could sell for about $300m, or a price equating to 12 or 13 times its earnings.
It is understood that parties picked up stakes in PRP Diagnostic Imaging last year for between seven and eight times its earnings and would probably be eager to cash out now and make a windfall. These shareholders are believed to include former Macquarie Group boss Nicholas Moore.
Mr Moore was probably banking on the increasing interest by Chinese investors in Australia’s healthcare sector when he bought in. Now he will probably capitalise as cashed-up buyout funds invest more heavily in the space to gain exposure to the senior market that is fuelling the earnings growth of healthcare groups.
This is amid a low interest rate environment.
The potential sale comes as Rothschild works on a sale of Everlight Radiology for Intermediate Capital Group.
The expectations are that Everlight could sell for about $400m, with annual earnings before interest, tax, depreciation and amortisation of about $30m.
TPG Capital, Ramsay Healthcare and possibly Dutch multinational Philips are among those said to be interested.
Quadrant Private Equity is also selling its radiology business Qscan through Stanton Road Partners and Citic-CLSA.
Qscan, which generates $65m in annual EBITDA, operates 33 clinics employing 40 radiologists. It will be placed on the market after the rival Everlight Radiology is sold.
Quadrant invested in Qscan in June 2017, along with North Coast Radiology, reportedly valuing the operations at $200m.
Mr Dorney and Mr Low did not return calls from DataRoom.
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