KKR to exit GenesisCare as China Resources, Macquarie buy control

GenesisCare announced that the consortium would acquire between 50.01% and 74% of the company, which is currently controlled by doctors and management. They will retain a minority interest under China Resources and Macquarie's ownership. According to a source familiar with the situation, the deal gives GenesisCare an enterprise valuation of A$1.7 billion ($1.3 billion).

The company is Australia's largest provider of cancer and cardiac services, operating 27 cancer centers and providing cardiology and sleep services in more than 80 locations nationwide. The company is also the number one player for private cancer services in the UK and Spain. It bought Cancer Partners UK from Apposite Capital in 2015, and now has 11 radiotherapy treatment centers. The company entered Spain in June with the acquisition of IMOncology from Nazca Capital, absorbing a network of 12 facilities.

GenesisCare treats more than 2,500 patients every day in more than 150 locations across these three countries and employs over 2,000 medical professionals and management staff.

KKR invested in GenesisCare in 2012, agreeing to buy up to 63% of the business, although this was not fully exercised. Its entry facilitated an exit for Advent Private Capital, which generated a money multiple of 2.8x on the sale of a 32% interest bought for around A$48 million in 2009, according to AVCJ Research. The size of KKR's investment was not disclosed, but it was reported at the time that the transaction valued the company at approximately A$600 million.

The catalyst for the sale to China Resources and Macquarie came from the recently struck free trade agreement between Australia and China. While GenesisCare will continue building its business in Western Europe, the new owners will help accelerate expansion plans for China specifically and Asia in general.

"With the strategic capability and positioning of China Resources Group, GenesisCare will accelerate plans for Asia and in particular China. There is a significant appetite for our world class capabilities in cancer and cardiac care. GenesisCare will become part of the solution in how China and developing Asia solves quality and access challenges around essential patient care," Dan Collins, managing director at GenesisCare, said in a statement.

China Resources is the majority partner in the consortium, with Macquarie Capital - the corporate advisory arm of Macquarie Group - participating in a minority capacity and acting as China Resources' financial advisor. The Chinese state-owned enterprise has interests spanning consumer products, power, real estate, cement, gas, pharmaceuticals and financial services, with several Hong Kong-listed subsidiaries. In 2015, it generated revenue and net profit of RMB472.9 billion ($70.7 billion) and RMB44 billion, respectively.

The GenesisCare deal is still subject to shareholder and Foreign Investment Review Board approval.

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• Topics
• Australasia
• Greater China
• Healthcare
• Trade sale
• Australia
• KKR
• Macquarie Group
• Exit