Evolution Healthcare takes Substantial Position, page-2

This is an very interesting development.

Evolution Healthcare were required by the NZ Commerce Commission to sell the Boulcott Hospital (which Pulse purchased) due their purchase of the Bowen and Wakefield privates in Wellington. The Commerce Commission was concerned that that Evolution would have too much market power in Wellington with 3 of the 4 hospitals if they keep Boulcott.

Evolution Healthcare purchased Boulcott Hospital for more than $20 million for in late 2012. Pulse Health paid $16 million upfront with a further $4 million earn out.

The articles does state that it the principals of Evolution buying into Pulse (not Evolution directly). This likely acceptable from an competition perspective, but it is likely that the principals determined that Pulse is undervalued as part of the transaction.

The principals have just purchased 10-11% of Pulse for approximately $6 million. Given that Boulcott will contribute 20% of the earnings of Pulse this appears to be an astute purchase from these principals.