Kohlberg Kravis Roberts is putting the finishing touches on its plans to buy Ramsay Health Care for $20bn, and at the same time the country’s largest private hospital operator is embarking on corporate activity of its own.
DataRoom understands that Ramsay is keen to line up as a potential buyer of the Healius day surgery business when it comes up for sale.
This is with or without KKR as its owner.
As earlier reported by this column, Healius is selling its day surgery unit – thought to be worth hundreds of millions of dollars – through advisory firm Gresham.
The move by Ramsay on the hospitals is part of its aspirations to build out a day surgery unit.
KKR’s deal to buy Ramsay with backers Hesta and the Abu Dhabi Investment Authority is on track to be presented to its board within the next fortnight after weeks of due diligence.
The New York buyout fund is on track to offer $88 per share for the business, despite its shares closing at $76.98 on Wednesday, sources say.
KKR is said to be highly committed to the transaction with its Europe, Asia, US, private equity, real estate and infrastructure funds globally all part of the deal.
Top executives at the prestigious buyout fund see a Ramsay deal as the future poster child for KKR given that it meets all of its investment criteria, including environmental, social and governance demands.
KKR is running a dual-track process to determine whether to sell Ramsay’s $8bn property portfolio or take on more attractively priced debt.
Investment bank Jefferies has been working on a possible sale of real estate, with four groups in the running recently reduced to three.
The understanding is that the pricing is shaping up for the real estate at a bullish 3.75 per cent yield.
The name that surfaces the most is Charter Hall, but NorthWest Healthcare Properties is also said to be aggressively shopping its credentials.
A theory still persists that KKR will retain the real estate for its own fund, with Hesta owning a small stake outside of the fund.
One option could be that Charter Hall and/or NorthWest Healthcare Properties manages a real estate fund for KKR, which is said to be offering co-investors the chance to gain exposure to the deal.
There had also been talk that the properties are to be sold off to various parties.
Working for KKR are Barrenjoey and Credit Suisse, while UBS is advising Ramsay.
Bank of America is also believed to be among the
banks lining up to fund a transaction.
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