IHH raises $2b from IPO, Abraaj Capital exits
IHH Healthcare, the hospital operator owned by Malaysian sovereign wealth fund Khazanah Nasional, has raised MYR6.3 billion ($2 billion) from its IPO after pricing the offering near the top of the indicative range. Abraaj Capital fully exited its holding in the company as part of the transaction.
It is the third-biggest IPO globally in 2012 after Facebook and Felda Global Ventures, and the first ever concurrent offering in Malaysia and Singapore.
IHH has sold 2.23 billion shares at MYR2.80 apiece, having marketed the offering at MYR2.67-2.85. A total of 22 cornerstone investors - including Blackrock, Capital Group, Och-Ziff Capital Management, Government of Singapore Investment Corp. (GIC) and Fullerton Fund Management - bought up 62% of the shares.
Of the total shares sold, 1.8 billion were new and 434.65 million were secondary shares held by Abraaj. The Dubai-based private equity firm acquired the shares as partial payment for Acibadem hospital in Turkey, which was bought by IHH in late 2011.
Prior to the IPO, Khazanah owned 62.1% of IHH, with Mitsui & Co, Abraaj and Acibadem chief Mehmet Ali Aydinlar holding 26.6%, 7.1% and 4.2%, respectively.
Based on the indicative price range, the offering values the company at 15.2-15.9x forward EBITDA, a premium to other regional hospital operators. IHH will use the bulk of the capital raised to repay bank debt. It operates hospitals, medical centers, clinics and other healthcare businesses across eight countries in Asia, the Middle East and Eastern Europe, including Singapore's Parkway Holdings, India's Apollo Hospitals Enterprise and Malaysia-based Pantai Hospital.
Bank of America Merrill Lynch, CIMB and Deutsche Bank are joint global coordinators for the offering. They share bookrunning duties with Credit Suisse, DBS and Goldman Sachs.
Given the weak appetite for IPOs in Asia, cornerstone investors - including some private equity firms - have covered a significant portion of several offerings. D.E. Shaw and PAG Capital were among those who picked up about one quarter of Haitong Securities' $1.7 billion Hong Kong offering, while Baring Private Equity Asia and Prax Capital accounted for 48.4% of China Yongda Automobile Services' $215 million offering, also in Hong Kong.
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