Parties interested in buying the Healius diagnostic imaging unit are now signing up confidentiality agreements to receive information memorandums.
The IMs are been released into the market in the last two days of the working week, say sources, as interest continues to remain strong for the unit known as Lumus Imaging.
It is up for sale through UBS in a quest to ease the debt burden on the remaining Healius pathology operation, and is forecast to generate between $60m and $70m of annual earnings before interest, tax, depreciation and amortisation.
While some questioned whether a bid for the whole company could be possible, the focus now is more solely a sale of the diagnostic imaging unit, with sources saying the deal metrics aren’t as compelling for the whole.
But one possibility touted is a break up of the Lumus Imaging operations by state.
This may achieve a larger price, where for instance, a group like Integral Diagnostics buys NSW operations and Sonic Healthcare buys Victoria.
Yet with such strong interest from infrastructure funds and private equity, eager to capitalise on the industry’s growing use of artificial intelligence, the more likely scenario is it achieves a strong price for the whole unit.
Most think a sale price of about $700m is certainly achievable.
As earlier reported, parties lining up to take a look include Partners Group, Intermediate Capital Group, IFM, Bain Capital, Sonic Healthcare, Ramsay Healthcare and possibly Morgan Stanley Infrastructure Partners, Adamantem Capital and Quadrant Private Equity.
Healius is the country’s second largest pathology and diagnostic imaging services provider, reporting a $9m loss for the six months to December amid tough industry conditions.
More Coverage
Privatisation of NZME on cards amid ‘clickbait’ complaints
There are rumblings across the Tasman over the state of New Zealand’s media industry, and some wealthy Kiwis are said to be plotting to do something about it.
Private equity firms not interested in Domain
The $1.7bn Domain Group is said to have been shopped to private equity firms far and wide to test their interest in taking a stake in the business. None appear keen, sources say.