EQT scans I-Med opportunity

I-Med was previously a portfolio company of CVC Capital Partners, which acquired the business in 2006 as part of a A$2.7 billion (then $2.1 billion) buyout of its parent, DCA Group. Things took a turn for the worse and in 2011 a near bankrupt I-Med was sold to a consortium of investors led by Anchorage Capital and Fortis Investment via a debt-for-equity swap.

The company then went through a A$240 million restructuring and refinancing led by Allegro Funds last November. That is when EQT entered with Caisse de dépôt et placement du Québec of Canada and Singapore's GIC Private. The value of the transaction was not disclosed but it is reportedly around A$400 million.

"Having doctors feel comfortable with owners is critical," explains Simon Griffiths, a partner with EQT in Singapore. "Our long heritage and knowledge of the sector, plus the fact that we owned and operated a number of doctor-led businesses. helped to persuade the current shareholders we would be credible owners."

The transaction was PE firm's first in Australia and only its second Asia investment from the EUR1.1 billion ($1.48 billion) EQT Mid Market Fund. But EQT had already made a number of similar healthcare investments in other jurisdictions, including Finland-based Terveystalo and Europe-focused Atos Medical.

"We know the medical diagnostics space well, and we were looking for companies in which to invest in Asia, but there aren't very many," says Griffiths. "This led us to think about a company in Australia because radiology is one those medical disciplines which travel quite well over distance."

Set up in 2000, I-Med offers various diagnostics imaging services including X-ray, MRI and ultrasound. The company claims that more than 4 million procedures are performed annually in its 200 clinics.

Given the company's ability to provide services over distances, there is plenty of scope for expansion. "In Australia the diagnostics space growing at around 5% per annum and we expect this to be much higher in Asia because it is under penetrated," he says.

EQT's plans for I-Med include leveraging its extensive network of industry advisors. The PE firm has brought in management from previous portfolio investments in addition to the former CEO of Siemens Medical.

While opportunities in Asia loom large, Griffiths notes there is much to be done in Australia. "The geographical distances are enormous so you have to use your resources cleverly," he says. "I think, at this stage, the company is on a good trajectory in Australia to develop and grow into a coherent network."

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• Topics
• Healthcare
• Australasia
• Buyouts
• EQT Partners
• healthcare
• Australia
• buyout