Malaysia's IHH Healthcare sells education arm to Rise Fund
A consortium led by The Rise Fund, TPG’s global impact investment platform, has agreed to acquire the medical education arm of Malaysia-headquartered IHH Healthcare for MYR 1.35bn (USD 306m).
Malaysian conglomerate Hong Leong Group was identified as deal co-lead alongside The Rise Fund. Hong Leong has previous experience collaborating with TPG Capital. In 2019, they purchased a portfolio of Southeast Asia hospital assets from Columbia Pacific Management for USD 1.2bn. Columbia Asia is one of the largest private hospital operators in the region after IHH.
The key business under IHH’s medical education arm is International Medical University (IMU), the largest medical and healthcare-focused higher education institute in Malaysia. It also owns a hospital, currently under construction. Columbia Asia will absorb the hospital.
IHH has more than 15,000 licensed beds across 80 hospitals in 10 countries. It operates under eight brands, including Acibadem, Mount Elizabeth, Prince Court, Gleneagles, Fortis, Pantai, Parkway, and IMU. Revenue came to MYR 17.1bn in 2021.
The company was formed by Khazanah Nasional as a holding vehicle for a string of healthcare assets, some of which were acquired from private equity firms. The IMU divestment is part of a broader portfolio rationalisation effort intended to focus on long-term core assets in existing markets and enable expansion into adjacent geographies through a clustering strategy.
IMI generated MYR 257.6m in revenue last year, up from MYR 248.7m in 2020. Over the same period, EBITDA rose from MYR 75.7m to MYR 86.7m. Nevertheless, the business pales into insignificance against the revenues of Parkway Pantai and Acibadem Holdings, which came to MYR 12.4bn and MYR 4.3bn, respectively.
“This investment is part of a thematic focus globally on professional education in the medical sector and will be a strong addition to the extensive healthcare and education portfolio that TPG has both globally and in Malaysia,” said Tunku Ali Redhauddin Tuanku Muhriz, a senior advisor at TPG, in a statement.
The first iteration of The Rise Fund closed at USD 2bn in 2017. A second launched with a target of USD 2.5bn and a final close has yet to be announced. In April, a new climate-focused strategy, TPG Rise Climate, raised USD 7.3bn. This took the overall impact platform’s assets under management (AUM) to USD 14bn.
Other Asia healthcare investments under TPG Rise include Evercare, a South Asia and Africa-focused healthcare platform with a portfolio of 29 hospitals, 16 clinics, and over 70 diagnostics centres. Evercare is owned by Evercare Health Funds, a USD 1bn vehicle previously managed by now-defunct private equity firm The Abraaj Group. TPG Rise was brought in as a replacement GP.
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