Partners Group targets $1.4b buyout of Australia's Healius
Partners Group has been granted a call option on Chinese conglomerate Jangho Group’s 15.9% stake in Australian healthcare services provider Healius, enabling the private equity firm to make a A$2.1 billion ($1.4 billion) bid for the entire business.
Shenzhen-listed Jangho is best known as a supplier of construction and decoration materials such as curtain wall, but in recent years the company has diversified into healthcare, initially in China. It sought to enter the Australian market early last year, buying its interest in Healius and offering to acquire the company outright for A$1.7 billion, or A$3.25 per share. This was rejected.
Jangho has now agreed to sell its 98.9 million shares in the company to Partners Group at a strike price of A$3.30 for a total consideration of A$326.5 million – plus an option premium of A$30 million. The Chinese company said in a filing that it remains committed to growing its healthcare business, and the cash generated will go towards this, but it wasn't the right time to pursue Healius.
Partners Group is now offering to buy all outstanding shares in Healius for A$3.40 apiece, according to a separate filing. This represents a 23% premium to the February 25 closing price of A$2.76. Healius' stock ended February 26 up 15.5% at A$3.19.
The company is one of Australia's largest healthcare operators, with interests spanning pathology, medical centers and medical imaging. As of year-end 2019, It had 99 pathology labs and 2,235 approved sample collection centers; 73 medical centers, 13 GP practices, and 14 day hospitals; and imaging facilities in 29 hospitals, 61 community centers, and 55 medical centers.
Pathology accounts for more than half of revenue, but there has been a push into medical centers, dental care, IVF services, and day hospitals. Revenue came to A$1.8 billion in the 2019 financial year, up from A$1.7 billion in 2018, while net profit rose from A$4.1 million to A$55.9 million. For the six months ended December 2019, revenue, EBIT and net profit were A$945.1 million, A$75.7 million, and A$42.1 million, respectively.
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