KKR pursues $15b Australia healthcare take-private
A KKR-led consortium has proposed to acquire Ramsay Health Care, an Australia-listed hospital operator with a footprint that encompasses Australia, Europe, and other parts of Asia, at a valuation of approximately AUD 20.1bn (USD 14.9bn).
Should the deal proceed, it would be the largest private equity buyout in Australia outside of the infrastructure and utility space. The Ramsay situation continues a trend of global managers pursuing large, listed businesses in the country. The Blackstone Group recently agreed to acquire casino operator Crown Resorts at an equity valuation of AUD 8.9bn.
The consortium is willing to buy all outstanding shares for AUD 88.00 apiece, less any subsequent dividend payments, according to a filing. This represents a 37% premium to the May 19 closing price. On May 20, Ramsay’s stock rose 24.2% to close on AUD 80.00, a more than two-year high. Shareholders can cash out or roll over a portion of their interests into the acquisition vehicle.
Ramsay’s board is allowing the consortium to conduct non-exclusive due diligence to explore whether it can put forward a binding proposal.
Founded in 1964, Ramsay has 532 service locations across 10 countries with more than 8m annual patient admissions and visits. It claims to be the largest private hospital operator in Australia and the second-largest private care provider in Europe.
The network comprises 72 private hospitals and day surgery units and a pharmacy retail franchise with 59 outlets in Australia; around 350 specialist clinics and primary care units in France, Denmark, Norway, Sweden, and Italy; and 34 acute hospitals and day procedure centres, three neuro-rehabilitation facilities, and a 72-site operation for patients with mental health conditions in the UK.
In Asia, Ramsay operates three hospitals in Indonesia, three hospitals and a nursing college in Malaysia, and one day surgery in Hong Kong.
The mainland Europe business falls under Euronext-listed Ramsay Santé, in which the parent company holds a 52.5% stake. The Asian operation, Ramsay Sime Darby, is a 50-50 joint venture with Malaysia-based Sime Darby.
In the 12 months ended June 2021, Ramsay generated AUD 13.3bn in revenue, up from AUD 12.4bn a year earlier. Asia Pacific, the UK, and Europe contributed AUD 5.5bn, AUD 1bn, and AUD 6.8bn, respectively. Over the same period, EBITDA rose from AUD 1.81bn to AUD 2.05bn and net profit increased from AUD 309.2m to AUD 511.5m.
The filing did not mention which KKR funds are participating in the transaction or the identities of other consortium members. The private equity firm is currently deploying its fourth pan-Asian fund, which closed on USD 15bn last year. Other Australian healthcare exposure includes cancer care clinic operator GenesisCare and cosmetics treatments business Laser Clinics Australia.
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