Indigenous New Zealand LP backs pathology business

TPT has acquired a 4% stake in Asia Pacific Healthcare Group (APHG), the New Zealand pathology unit of Australian national private healthcare provider Healthscope. NZ Super and OTPP, which acquired 50% stakes in APHG in December for a combined NZ$550 million ($387 million), will see their positions reduced to 48% each.

APHG has more than 2,000 staff operating across a network of 25 laboratories and 150 collection centers around New Zealand. It has been heavily involved in providing testing as part of local response to COVID-19, processing around one-third of all tests – the largest of any single service provider.

APHG is the largest player of its kind in New Zealand, providing laboratory testing services to about 75% of the population and performing 6.7 million procedures a year. It is also a leading provider of veterinary pathology and analytical testing services.

APHG generated revenue of A$240.2 million ($182 million) and EBITDA of A$58.1 million in the 12 months ended June 2018, the last disclosure prior to Healthscope's privatization by a Brookfield Asset Management-led consortium.

"Investing in support of a business that cares for the health of New Zealanders fits perfectly with our world view," Paul Majurey, chairman of TPT, said in a statement. "There are enormous changes happening in the health sector, with a focus on improving Maori health outcomes. As co-investors, we believe we can add significant value to APHG by deepening its understanding and ability to deliver for Maori communities across Aotearoa."

Aotearoa is a Maori term for New Zealand. Maori tribes, known as iwi groups, are significant landowners in New Zealand and have emerged as major players in the domestic private equity space in recent years, both through direct and third-party commitments.

Iwi groups began receiving financial settlements from the government in the 1990s. These related to land disputes that traced back to the 1840s. A number of these organizations have come to be recognized as sophisticated, patient, and attuned to regionally-based growth opportunities. Set up in 1998, Ngai Tahu Holdings is the largest iwi investor with about NZ$1.5 billion in assets under management as of June 2020.

TPT invests in domestic companies via the Tapapa Investment Fund, representing 28 indigenous entities with a corpus of NZ$115.5 million. The investor describes its strategy as focusing on "generational" investment periods of 15-20 years.

The APHG transaction is its second deal alongside NZ Super. The two investors joined local GP Direct Capital in acquiring a combined 31% stake in heavy vehicle rental company TR Group last year. This facilitated an exit for CHAMP Ventures.

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