TPG to buy Healthscope's Asia pathology assets for $206m
TPG Capital has agreed to acquire the Asia pathology assets of Australian hospital operator Healthscope for A$279 million ($206 million), giving it control of 39 pathology laboratories across Singapore, Malaysia, and Vietnam.
Healthscope's divestment follows a strategic review of the pathology business and will allow the company to focus on its core operations, according to a statement. It will use the proceeds from the sale to pay down debt and to fund expansion. The transaction is expected to close by the end of August.
Operating under the Gribbles Pathology and Quest Laboratories brands, the Asia pathology business generated A$61.7 million in revenue for the 12 months ended June 2017, down from A$62.5 million the year before. The division's operating EBITDA shrank from A$18.3 million to A$18.2 million, representing about 4% of Healthscope's group operating EBITDA.
Healthscope's overall revenue for the period grew from A$2.2 billion to A$2.3 billion, according to its annual report, while its net profit shrank from A$181 million to A$111 million.
Earlier this year Healthscope rejected takeover bids from Brookfield Asset Management and a consortium led by BGH Capital that valued the company at A$4.4 billion and A$4.1 billion, respectively. It said both offers undervalued the company and failed to take into account the potential for improvement in operating performance and returns from the investment portfolio.
TPG previously privatized Healthscope with The Carlyle Group in 2010 and re-listed the business in 2014. That deal was co-led by Ben Gray, one of the founders of BGH.
Healthcare is a core investment focus for TPG, which holds several Asian healthcare assets including India's Sai Life Sciences and Manipal Hospital Enterprises, Taiwanese contract research organization OPC Holding, and Australian medical researcher Novotech.
The firm also operates Asia Healthcare Holdings, a healthcare-focused operating and investment platform that recently received a $50 million investment from Temasek Holdings, through its middle market investment platform TPG Growth.
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