Carlyle Group LP, the world’s second-largest private-equity firm, purchased a 13.5 percent stake in Meinian Onehealth (Group) Co., the biggest private medical check-up services company in China.
The investment was made by Carlyle’s yuan-denominated fund, established with Beijing’s municipal government in 2010, the company said in a statement today, without giving a price for the stake. The domestic fund reached 3.2 billion yuan ($503 million) in July last year, according to Carlyle.
Private-equity investors are turning to China’s growing middle class as the volume of deals in Europe and the U.S. shrinks. The check-up service industry in China generates 40 billion yuan of annual revenue, and is growing at 15 percent a year, driven by increasing awareness of health issues and rising disposable income among the nation’s middle class, said Janine Feng, a managing director at Carlyle, in a phone interview today.
“The industry is historically dominated by public hospitals, but in the last 7 to 8 years you’ve seen the private sector entering health-care services,” she said. Carlyle’s other investments in health care companies will help Meinian expand, it said in the release today.
The U.S. fund has investments in Healthscope Ltd., Australia’s second-biggest private hospital operator, Integrated Dental Holdings Plc and Associated Dental Practices, two dental care providers in the U.K., Carlyle said. The private-equity firm also owns a stake in China’s Concord Medical Service Co.
Meinian offers medical examinations, disease screening, and doctor referral services to individual and corporate customers. The company became China’s largest private provider of preventive health care check-ups in 2011, with 83 clinics in 41 cities, around 20 of which will be opened by the end of this year, according to the release.
Including the domestic fund, Carlyle has invested about $4 billion in more than 60 deals in China, according to the statement. Carlyle was among the first global funds to announce it had raised a yuan-denominated fund.
Meinian Onehealth is the second investment made by Carlyle’s Beijing fund, after another investment in a consumer company last year, Feng said without disclosing the other company. Carlyle collected 2.4 billion yuan in the first round of fundraising with Beijing’s government in July 2010, after setting up a $100 million fund with Fosun Group in Shanghai five months earlier.