NZ Super, OTPP buy New Zealand pathology business

The investors will each take a 50% stake in Asia Pacific Healthcare Group (APHG), which operates a network of 25 laboratories and 150 collection centers across the country, employing more than 2,000 staff and serving 13 district health boards. Last year, it performed 6.7 million pathology patient episodes. It is also a leading provider of veterinary pathology and analytical testing services.

More recently, APHG has been conducting around one-third of all COVID-19 tests in New Zealand, the largest contribution by a single service provider.

The deal comes about 18 months after a consortium led by Brookfield Asset Management privatized Healthscope, Australia’s only national private healthcare provider with 43 private hospitals, at an equity valuation of A$4.38 billion ($3.17 billion). However, the company has been divesting pathology assets for more than five years.

In 2015, Crescent Capital Partners acquired Healthscope’s Australian pathology operations – then comprising 31 labs and 550 collection centers – for A$105 million. Three years later, TPG Capital paid A$279 million for the Southeast Asia business, assuming control of 39 labs across Singapore, Malaysia, and Vietnam. It is now part of a pan-Asian pathology platform.

APHG generated revenue of A$240.2 million and operating EBITDA of A$58.1 million in the 12 months ended June 2018, the last disclosure prior to Healthscope’s privatization.

“We look forward to supporting the APHG management in continuing to deliver high-quality essential health services to New Zealanders. As crown-owned, long-term investors, the fund, together with Ontario Teachers’, will look to provide the expertise, patient capital and governance needed to drive innovation and add long-term value to the business,” Stephen Gilmore, CIO of NZ Super, said in a statement.

Ben Chan, regional managing director for Asia at OTPP, added that the acquisition of APHG builds on the pension plan’s global track record of investing in healthcare businesses. OTPP is currently in the process of acquiring another New Zealand healthcare asset, dentistry chain Abano, in conjunction with BGH Capital. The deal secured shareholder approval last week.

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• Topics
• Australasia
• Buyouts
• Healthcare
• New Zealand
• New Zealand Superannuation Fund
• OTPP