By Shivangi Lahiri and Yantoultra Ngui
London: Malaysia’s IHH Healthcare, an operator of private hospitals in Asia, said on Wednesday it is acquiring local private hospital chain Island Hospital in a deal valuing the latter at 3.92 billion ringgit in cash ($901.15 million).
Reuters reported in June that IHH and Sunway Medical Centre were among bidders vying for the Penang-based hospital that Asian buyout fund Affinity Equity Partners purchased in June 2015.
“The proposed acquisition will enable IHH to consolidate and solidify its presence in Penang and strengthen its competitive position across Malaysia,” it said in a stock exchange filing.
The acquisition is the first by IHH’s group CEO Prem Kumar Nair since he took the helm of the medical group in October.
Nair, a physician and healthcare executive with over three decades of experience in the sector, told Reuters in December in his first media interview since helming IHH that it was looking for acquisitions including in Indonesia and Vietnam.
“We expect significant synergies from the transaction,” Nair said in a separate statement.
IHH, which is listed on the Malaysian and Singaporean stock exchanges, added that it expects more than 200 million ringgit in synergies over the next five years following the acquisition.
IHH said it will also gain a larger share of medical travel into Malaysia, as Island Hospital is the leading hospital for medical tourism, attracting one in three inbound foreign patients to Malaysia.
The proposed acquisition of Island hospital will be funded via internally funds and its subsidiaries and external borrowing, and is expected to be completed by the end of 2024, IHH said in the filing.
Founded in 1996, Island Hospital is a 600-bed hospital in Penang, Malaysia, with over 80 full-time specialists, according to its website. Annually, it treats 400,000 patients and performed 15,000 surgeries.
Island Hospital will become IHH’s 18th hospital in Malaysia, according to IHH.
IHH, which has a market value of $12.89 billion according to LSEG data, is one of the world’s biggest private healthcare firms with over 80 hospitals in 10 countries, its website showed.
Its hospital brands include Acibadem and Gleneagles.
Citigroup is the financial advisor to IHH on this deal.
($1 = 4.3500 ringgit) (Reporting by Shivangi Lahiri in Bengaluru and Yantoultra Ngui in Singapore; Editing by Shreya Biswas and Kim Coghill)
