Blue Sky exits Australia's HPS via $116m trade sale

The private equity firm said in a statement that it would generate a net IRR in excess of 25% from the investment, which was made in July 2015. Blue Sky acquired a majority interest in HPS through a co-investment with Partners Group intended to enable the company to grow its footprint.

At the time, HPS was already Australia’s leading outsourced hospital and oncology pharmacy services business, with an annual turnover of more than A$130 million and 430 staff across its network. It was founded 40 years earlier as the sole pharmacist serving a 28-bed nursing home in South Australia.

During the holding period, Blue Sky claims to have more than doubled earnings, driven by strong revenue growth. HPS now serves more than 100 sites and employs in excess of 580 staff, including 200 pharmacists. The company is expected to increase EBOS’ underlying EBITDA by at least 5%. The latter reported EBITDA of A$222.5 million for the 2016 financial year.

EBOS distributes healthcare, medical and pharmaceutical products, as well as animal care products. HPS will form part of the company’s healthcare distribution business, although the original management team will retain responsibility for day-to-day operations.

“The acquisition of HPS continues EBOS’ history of expansion in both the Australian and New Zealand hospital markets where it is the leading provider of wholesale pharmaceutical services. By virtue of this acquisition, EBOS will be the leading provider of outsourced pharmacy services in the Australian hospital sector,” Patrick Davis, CEO of EBOS, said in a separate statement.

Blue Sky had A$2.7 billion in fee-earning assets under management as of year-end 2016, up from A$1.7 billion 12 months earlier. It is targeting A$5 billion by 2019, across private equity and venture capital, private real estate, real assets and hedge funds. Over the last 10 years, the listed manager has delivered an annual average net return of 16.4%.

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• Topics
• Australasia
• Trade sale
• Healthcare
• Australia
• Exit
• Blue Sky Private Equity
• Partners Group