Suitors line up for Healthscope’s New Zealand business

In New Zealand, Healthscope promotes itself as having one of the country’s leading pathology services.

Private equity giant Brookfield is understood to have short-listed parties interested in the sale of its New Zealand-based Healthscope pathology business.

One of the parties some suspect could have made the shortlist is Pacific Equity Partners, while infrastructure investor Morrison, which had earlier been vying for the operation, is now out of the competition.

Brookfield was exploring a sale of the business before the outbreak of the COVID-19 pandemic. Its moves come after it purchased Healthscope — Australia’s second-largest hospital operator — for $4.4bn last year.

A challenge for private hospital operators is that they have been affected by the lack of elective surgeries performed in recent weeks.

Elective surgeries are now allowed to take place once again after a suspension due to the COVID-19 crisis. The sales process for the NZ operations is being run by JPMorgan.

Earlier, parties targeted as possible buyers of the pathology business were infrastructure groups such as Morrison, Queensland Investment Corporation and EQT Infrastructure. Other groups looking at the business included Japan’s Mitsui, which is a major healthcare investor in Asia, and the $15bn Sonic Healthcare. Healius was also seen as a potential suitor.

While pathology has been a good growth business for Healthscope, it is not necessarily the core market in which the company wants to operate.

In Australia, Healthscope runs 43 private hospitals. In NZ, Healthscope promotes itself as having one of the country’s leading pathology services.

The NZ business is estimated to be worth about $200m.