TPG, Carlyle assess exit options for Australia's Healthscope
Healthscope, an Australian hospital operator owned by TPG Capital and The Carlyle Group, looks set for an IPO that could generate proceeds of around A$4 billion ($3.5 billion).
Robert Cooke, Healthscope's executive chairman and managing director, told Reuters that three options are under consideration: an IPO, a trade sale and a sale into a property trust. However, a public market offering is seen as the most likely route, and investment banks have reportedly been invited to pitch for the mandate.
Cooke noted that there is a shortage of healthcare stocks in Australia. Publicly traded rival hospital operators Ramsay Health Care and Sonic Healthcare both outperformed the broader market in 2013.
Healthscope operates more than 4,500 inpatient beds in 33 hospitals, four dedicated mental health hospitals and four rehabilitation centers in Australia, as well as managing three hospitals on behalf of ACHA Group. It also owns and operates around 60 medical centers and specialist skin clinics.
Operations stretch to pathology, with services provided in Australia, New Zealand, Singapore and Malaysia, and residential and attendant care in Australia.
The company reported an operating EBITDA of A$328.1 million for the year ended June 2013, up 8.3% year-on-year, while revenues rose 4.5% to A$2.2 billion. Due to impairment charges arising from the sale of certain pathology assets, lease charges and other costs, a net loss of A$117.1 million was recorded for the period.
TPG and Carlyle acquired Healthscope in 2010 for A$1.99 billion and subsequently took the company private.
Australia's IPO market staged a significant recovery, starting in the second half of 2013. According to AVCJ Research, private equity-backed IPOs generated proceeds of $2.5 billion in 2013, up from $156 million the previous year.
Pacific Equity Partners-owned Spotless Group, Macquarie-backed 3P Learning, CHAMP Ventures portfolio company SG Fleet Holdings and CVC Capital Partners' Mantra Group are all said to be considering or planning for offerings in 2014.
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