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• Bridget Carter

DataRoom Editor

@BridgetCarterb

Henry Bateman is believed to be trying to shore up funding to make aplay for a portfolio of medical centres owned by Healius — the company hisfather, Ed Bateman, founded.

It is understood Mr Bateman is looking to secure support from banks andother private equity firms to buy part of the company he used to work for underthe direction of his father.

It is understood Healius is looking to run a sales process for itsmedical centres overseen by investment banks UBS and Morgan Stanley. The company was a takeover target last year byshareholder Jangho, which has a stake of 15.93 per cent, and after privateequity firms circled the company.

When parties looked at Healius, a break-up was said to be on the cards,although activity appears to have gone quiet, given that the company’s futurerests on Jangho.

Mr Bateman, whose move on Healius is backed by mining heir AngelaBennett, was a Primary Health Care executive up until 2016, when he left tostart his new healthcare venture.

He now runs Cornerstone Health, which operates bulk billing medicalcentres in Queensland, NSW and Victoria.

Mr Bateman’s brother, James, is also in the medical industry. He runspathology and medical laboratory specialist 4Cyte Pathology and is also aformer Primary Health Care executive.

Healius, previously Primary Health Care, has a market value of $1.84bnand its portfolio is made up of 95 sites of medical centres and day hospitalsaround the country. These include 73 medical centres, 61 of which have dentalservices and four have IVF clinics, 14 day hospitals, nine of which arestand-alone, and 13 GP practices under the Health & Co brand.

Last financial year they made a $1.9m profit based on $61.4m in earningsbefore interest, tax, depreciation and amortisation, which was up 14.3 per centfrom the previous year. They generated $19.7m of revenue.

The Bateman move comes after Healius remained committed to reducing itsnet debt to a gearing at 24.8 per cent at the end of last financial year,compared to 29.9 per cent a year earlier.

The medical centres are considered to be a mixed bag, with some of thesmaller centres inherited as part of the group’s Symbion acquisition seen asless favourable.

However, some expectthat the division will sell for a strong price, given that healthcare remainsin favour with many private equity buyers and it may attract interest fromheavyweight Ramsay Healthcare. A sale of Healius assets is being considered asprivate equity firm Brookfield weighs a sale of its Healthscope pathologyassets in New Zealand. Investment bank UBS was the defence adviser forHealthscope when Brookfield embarked on a $4.4bn takeover last year and is alsoin line to handle that sale should it proceed.

It is understood that it is early days with respect to the pathologyassets, with Brookfield still weighing whether to retain the assets, sell themor offer them up through an initial public offering. However, some believe thatflyers about a potential sale are already circling.

New Zealand’s Overseas Investment Office estimates Healthscope’s assetsare worth $NZ600m ($580m).

The pathology operations operate under the Labtests New Zealand bannerand there are thought to be about 24 labs.

A deterrent for buyers could be the short contracts with the districthealth boards in New Zealand, of which Healthscope has about nine of 17. Thecontracts are understood to expire at different times.

One of the potential buyers being touted for the business is EQTInfrastructure.

An acquisition of the Healthscope assets could follow on nicely from theprivate equity firm’s launch of its Australian office, the opening of which isset for Sydney next week.