Macquarie-backed China Resources buys GenesisCare for $1.7b
Dan Collins will remain as managing director GenesisCare. James Alcock
by Sarah ThompsonAnthony MacdonaldJoyce Moullakis
Macquarie Group-backed China Resources has added a bulky transaction to the bulging list that require sign-off from the Foreign Investment Review Board.
As revealed by Street Talk on Monday, China Resources, aided by Macquarie, is poised to acquire cancer and cardiac services business GenesisCare.
The sale price equates to an enterprise value of $1.7 billion. When majority owner KKR & Co bought into GenesisCare in August 2012, the enterprise value of the company was $550 million.
Macquarie and China Resources won preferred bidder status on Sunday. All eyes are now on whether the transaction gets FIRB's green light.
The consortium is investing with management and 150 or so doctors for a stake in the business of between 50 per cent and 70 per cent. The deal also requires shareholder approval.
KKR is selling its entire 45 per cent stake.
Well-regarded founder Dan Collins will remain as managing director of the company. It's understood he has retained his shareholding.
The new owners plan to continue expanding the business in Europe, with the consortium expected to give GenesisCare more firepower to access the key Chinese healthcare market.
As Street Talk also revealed on Monday, GenesisCare is refinancing its debt facilities up to $800 million, including Australian and international banks, which will help fuel its market share grab.
GenesisCare is Australia's largest provider of cancer and cardiac care, and the biggest private provider of cancer care in the UK and Spain. The company expected $110 million EBITDA in the year to June 30, increasing to $140 million next year.
Following last month's acquisition of Spain's IMOncology, which provides radiotherapy and medical oncology to public and private patients across 12 sites, GenesisCare now has 22 cancer centres and five more under development across the United Kingdom and Spain.
In Australia GenesisCare has 27 cancer treatment centres, 10 major cardiac centres and 70 smaller cardiac centres.
Macquarie and China Resources had been competing against Citigroup-advised Bain Capital; The Carlyle Group, tended to by Michael Firmin's Record Point; and China's Ping An.
Sources said the two private equity firms were keen to re-engage should China Resources fail to secure FIRB approval.
Luye Medical's $938 million acquisition of local hospital operator Healthe Care last year underscored the lofty prices Asian buyers are happy to pay for health assets they see strategic value in. However, the Luye deal was also just one example of a drawn-out transaction under FIRB's scrutiny of Chinese bidders.
It took three months for Luye to get FIRB's green light.
GenesisCare was advised by Credit Suisse's Michael Stock and UBS, and Stephen Dobbs from law firm Herbert Smith Freehills.
Corrs Chambers Westgarth provided legal counsel to Macquarie and China Resources.
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