IHH Healthcare Bhd., Asia’s biggest hospital operator, is weighing a bid of as much as A$5 billion ($4.5 billion) for Healthscope Ltd., the Australian health-care provider owned by TPG Capital and Carlyle Group LP, said two people familiar with the matter.
TPG and Carlyle have put plans for an initial share sale of Australia’s second-largest private hospital operator on hold and will start taking bids for the company in April, one of the people said. Healthscope’s operating company without its hospital properties could be valued at A$4 billion, the people said, asking not to be identified as the process is private.
IHH, 44 percent owned by Malaysia’s sovereign wealth fund Khazanah Nasional Bhd., has been expanding through acquisitions to benefit from rising demand for medical services in Asia and Europe. It bought Singapore’s Parkway Holdings Ltd. in 2010 and completed the purchase of a 60 percent stake in Acibadem Saglik Hizmetleri & Ticaret AS, Turkey’s largest hospital group, in 2012, according to data compiled by Bloomberg.
“It’s good for IHH to put a foot in the Australian market,” James Lau, who helps manage $300 million as director of portfolio investment at Pheim Asset Management Sdn. in Kuala Lumpur, said by phone. “The synergy is there, but the challenge is to extract value from the deal without stumbling.”
A $4.5 billion acquisition would be the biggest by a Malaysian company since December 2012, data compiled by Bloomberg show.
IHH is always looking at “value-accretive opportunities” to add to its holdings, it said in an e-mailed response to questions. The Kuala Lumpur-based company declined to comment on specific transactions.
Spokeswomen for Carlyle and TPG declined to comment. The Wall Street Journal first reported the talks yesterday, citing people familiar with the matter.
IHH runs 33 hospitals as well as medical centers, clinics and other health-care businesses across nine countries including Vietnam, India and China, its website shows. The company’s shares have rallied 38 percent since its July 2012 initial public offering in Kuala Lumpur.
Healthscope operates 44 hospitals including the Prince of Wales Private Hospital in Sydney and Melbourne Private Hospital, according to its website. It also runs pathology centers in Australia, New Zealand, Malaysia and Singapore.
The two U.S. private equity firms bought Healthscope for A$2.7 billion in 2010, beating KKR & Co. to what was then was Australia’s biggest buyout in eight years. Ramsay Health Care Ltd. is the country’s largest private hospital operator.