KUALA LUMPUR (Sept 11): The Hong Leong group in partnership with private equity firm TPG has won a bid to buy the hospital business of Columbia Asia group in Southeast Asia, sources say.
“They clinched it after a sizeable top-up to their initial bid,” a source tells theedgemarkets.com, describing it as an “expensive” acquisition.
While details are scant, sources indicate that the Hong Leong-TPG team is paying around US$1.2 billion cash for the hospital business. This is not too far off from media estimates, for instance Bloomberg reporting last month that a deal could value Columbia Asia’s hospital business, excluding the India operations, at US$1.2 billion.
Others who were in the race included Sime Darby Bhd and US-based investment firm General Atlantic.
It is understood that the acquisition will mark the Hong Leong group’s foray into healthcare. The conglomerate, controlled by billionaire Tan Sri Quek Leng Chan, is already in banking and financial services, property development, hospitality and leisure, manufacturing and distribution, among others.
The planned venture into healthcare is said to be spearheaded by the tycoon’s youngest son, Quek Kon Sean.
A private healthcare company, Columbia Asia is owned by Seattle-based International Columbia USA LLC (ICU). Its website shows that it has 12 hospitals in Malaysia, 11 in India, two in Vietnam and three in Indonesia, for a total of 28.
According to earlier news reports, Columbia Asia had started a formal sale process earlier this year. It drew first-round, non-binding bids from a number of investors, including sovereign wealth funds and private equity firms like KKR, CVC and Carlyle.
The last major healthcare transaction was in January this year, when IHH Healthcare Bhd completed a 31.17% stake acquisition of Fortis Healthcare Ltd in a US$584 million deal, allowing it to expand its footprint in India.