Feb 3, 2012

Malaysia - S’pore firm buys into Khazanah health unit investing US$50mil



PETALING JAYA: London-listed private equity investor Symphony International Holdings Ltd could end up with a minority stake in Khazanah Nasional Bhd's healthcare unit, Integrated Healthcare Holdings Sdn Bhd (IHH), when the latter goes for listing later this year.

Singapore-based Symphony said in a statement yesterday that its wholly owned subsidiary would invest US$50mil to buy a non-controlling stake in Integrated Healthcare Hastaneler Turkey Sdn Bhd (IHT), which is a unit of IHH. It also has an option to convert its investment in IHT into a minority stake in IHH.

“Symphony has identified a growing healthcare group and invested in it before the initial public offering. They are co-investing to swap their shares in IHT for IHH.

“It is a smart move and it complements what they have now. But it is too early to say how much they will eventually own in IHH,” said a source.

Symphony focuses on consumer-related businesses in the emerging markets of Asia, with a specific focus on luxury branded real estate, hospitality and healthcare ventures.

This comes just over a week after Khazanah and IHH completed the purchase of a 75% in Turkey's Acibadem Group, which in turn controls 13 hospitals and nine clinics in Turkey, and one hospital in Marcedonia. IHT is the controlling shareholder of Acibadem.

That deal makes IHH the second-largest healthcare group outside the United States in terms of number of beds. It now has 12,300 beds.

Khazanah paid RM3.66bil for the 75% stake in Acibadem and as a result of the share/cash deal, Khazanah shareholding in IHH has been reduced from 70% to 62.1% and Mitsui Corp from 30% to 26.6%.

Acibadem group owner, Mehmet Ali Aydinlar and Dubai-based Abraaj Capital have emerged as new shareholders in IHH, holding the remaining 4.2% and 7.1% stake respectively.

IHH also controls the entire equity in Parkway Pantai Ltd and has 11.2% stake in India's Apollo Hospital Enterprise Ltd.

Apollo is India's largest private hospital group and is listed on the stock exchanges of Madras and Mumbai.

Khazanah also owns 100% in International Medical University, which owns IMU Education.

IHH has appointed lead advisors and are preparing for a listing sometime in the third or fourth quarter this year.

Interestingly, just over a week after Khazanah's purchase of Acibadem, India's Fortis Healthcare (India) Ltd once in battle with Khazanah over Parkway also bought 85% stake in Singapore's RadLink-Asia Pte Ltd for S$62.9mil in its quest to expand the healthcare group.

This latest venture by Symphony into IHT complements its existing healthcare portfolio, which currently comprises Parkway Life Real Estate Investment Trust (REIT), one of Asia's largest listed healthcare REITs.

Symphony said in the statement that its track record in the healthcare sector began in 1995 with an investment in Apollo Hospitals in India, followed by a strategic stake in Parkway Holdings in 1999.

“Two private equity funds managed by the team at Symphony sold their shares in Apollo and Parkway to Khazanah in 2005 and 2008 respectively.

“In addition, Symphony sold its Parkway shares to Khazanah as part of Khazanah's US$3.5bil takeover offer to privatise Parkway in the third quarter 2010, which resulted in Symphony generating a 21.6% internal rate of return on its Parkway investment,'' the statement said.

It added that Anil Thadani and Sunil Chandiramani, who are directors of Symphony, were also previously directors of Parkway.

The deal with IHT is scheduled to be completed on Feb 8.

B.K. SIDHU
The Star



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