Kendall Court invests $55m in Indonesia hospital operator

Mandaya operates a 218-bed hospital in Karawang, an industrial city in West Java, and is currently constructing Mandaya Royal Hospital, a 420-bed facility in Jakarta that will focus on neuroscience, cancer, and cardiovascular issues. The company plans to build two additional hospitals in major Indonesian cities over the next five years, targeting the same specialties, for a total of 1,000 beds.

If Kendall Court's preference shares are fully converted into common shares, the firm will take a majority stake in Mandaya, Managing Partner Chris Chia told AVCJ. Kendall Court may also support the company's expansion through additional investments of up to $100 million.

Mandaya is Kendall Court's first investment in Indonesia's hospital sector, following regulatory reforms in recent years that allow foreign investors to take majority stakes in healthcare companies. The firm joins peers such as Creador, which committed IDR600 billion ($45 million) to Medikaloka Hermina last year, and CVC Capital Partners, holder of a minority stake in Siloam International Hospitals.

Indonesia's healthcare market is currently underserved, with only 12 hospital beds per 10,000 people – far below the global average of 30 per 10,000. The universal healthcare law, which calls for extending healthcare coverage to the entire country by 2019, is expected to significantly drive demand, especially in the country's already-overburdened public hospital network.

Private hospitals are seen as offering the best opportunity to fill this gap, particularly as the country's population ages and the incidence of chronic and lifestyle-related diseases such as heart disease and cancer grows in the urban areas targeted by Mandaya. The company also plans to attract more business by offering a higher quality of care and comfort than the public system, for which patients will be willing to pay a higher price.

Kendall Court focuses on equity-linked and mezzanine investments in Southeast Asia. The firm has deployed more than $600 million in the region since its founding in 2004 across the natural resources, healthcare, consumer, and telecommunications industries.

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• Topics
• Southeast Asia
• Healthcare
• Buyouts
• Indonesia
• Kendall Court Capital Partners