Adamantem to carve out cardiology unit from Australia's GenesisCare

Financial details were not disclosed, although The Australian Financial Review estimated the deal was worth up to AUD 250m (USD 174m). Adamantem’s second fund – which closed on AUD 794.8m in June 2021 – backs companies with enterprise valuations of up to AUD 500m.

The target company, CardioCo, will de-merge from the GenesisCare network upon completion of the transaction. Some doctors will retain a minority position in the company.

CardioCo is the only nationwide provider of cardiology and sleep services. The company employs more than 100 cardiologists and respiratory physicians, plus 700 technicians and support staff. It sees 200,000 patients each year at over 100 private practices across metro and remote regional areas. Operations are said to be tech and data-driven.

Coinciding with the transaction, CardioCo is set to acquire a cardiology practice in Sydney and establish a partnership with CardioNexus, a provider of outsourced cardiac diagnostic and remote monitoring services. There are plans to invest in technology, doctors, and services.

“As Australia’s population ages, CardioCo’s scale and expertise gives it a critical role of ensuring premium heart care reaches a larger number of patients,” Angus Stuart, a managing director at Adamantem, said in a statement, suggesting there was scope for an international expansion.

“We support the ambition of CardioCo’s doctors, teams, and management to expand in existing and new service areas to become the leading healthcare organisation to plan, promote, and enhance heart health in the Australian population, and beyond.”

Heart care is a major focus for healthcare providers, with around 1.2m Australians having one or more heart or vascular conditions and cardiovascular disease causing 27% of deaths. The country’s ageing population is expected to deepen demand for cardiology services.

The carve-out will see GenesisCare become one of the world’s largest dedicated oncology networks, with funds from the divestment to be directed towards develop of operations in the US, innovation programs, and an expansion of cancer care services across Australia, Europe, and the US.

KKR first invested in GenesisCare in 2012, taking a 45% stake for AUD 276m and providing an exit for Advent Partners. It sold four years later to a consortium including China Resources Group and Macquarie Capital that acquired a 50.1% position. KKR came back with a AUD 400m investment in 2018, taking a 20%.

Adamantem’s previous investments in the broader healthcare space includes aged care and retirement village operator Heritage Lifecare, which was acquired for about USD 80m in 2017. The following year, it acquired in-home and in-clinic care services provider Zenitas for about USD 88m.

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• Topics
• Australasia
• Healthcare
• Buyouts
• Australia
• Adamantem Capital
• KKR