
CVC buys majority stake in Philippines hospital business

CVC Capital Partners has acquired a 63.94% stake in Philippines-based hospital operator The Medical City (TMC) following the completion of a tender offer.
Jose Xavier Gonzales, chairman of Professional Services Inc, TMC’s parent company, said in a statement that the investment would result in a PHP 12.7bn (USD 223m) capital infusion. In addition, CVC’s healthcare expertise will support TMC’s “aspirations to move the needle globally in precision medicine, while elevating Filipino healthcare practice as a true patient partner,” he added.
The private equity firm made an investment of undisclosed size in TMC in July. This triggered a mandatory tender offer for up to 2.4m common shares, or 44.15% of the total outstanding shares. The combination of the initial investment and the tender offer would give CVC an overall stake of at least 61.71%, according to a statement made at the time.
The transactions applied to TMC’s Philippines business only. The company was expected to distribute all direct and indirect interests in Guam Healthcare Development to its existing shareholders.
TMC claims to be the largest healthcare network in the Philippines with the flagship The Medical City Ortigas facility in Metro Manila, four provincial hospitals, and over 50 clinics. It employs some 1,500 physicians and a 4,000-strong support staff. The flagship facility alone serves 50,000 inpatients and 500,000 outpatients each year.
Alfredo Bengzon, a founding director and former president and CEO of TMC, has returned as the company’s chairman emeritus. In contrast, Margaret Bengzon, another former leadership team member, will serve as a senior advisor to the new holding company. Alfredo Bengzon was supplanted by Gonzales, his nephew, in controversial circumstances in 2020.
“We are partnering with a management team led by President Eugenio Ramos that built a well-recognized leading brand in the Philippines across the whole spectrum of health care, from hospitals to clinics to the home, manifesting excellence from primary to subspecialty care practice,” said Brian Hong, a managing partner and head of Southeast Asia at CVC.
The private equity firm is currently raising its sixth pan-Asian fund and it had secured commitments of USD 4.45bn as of August. Phuong Chau International Hospital in Vietnam, HealthCare Global in India, Soho Global Health in Indonesia, and Yikang Pharmacy in China feature among CVC’s other healthcare investments in the region.
Other healthcare deals of note in the Philippines include a commitment of PHP 35.3bn to Metro Pacific Hospital Holdings (MPHH) by a KKR-led consortium in 2019. The transaction – which saw existing investor GIC restructure its holding and re-invest in the company alongside KKR – prompted MPHH to abandon plans for an IPO.
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