Malaysia’s IHH Healthcare and Sunway are among the three bidders in a race to acquire one of the country’s largest hospitals from buyout firm Affinity Equity Partners, people familiar with the situation said.
A second round of bids is expected to be called soon for Penang-based Island Hospital, which is being valued at more than $800 million, the people said.
The third bidder is an Asia-based sponsor with experience in the healthcare sector, one of the people said.
Asia’s healthcare sector is an attractive market for private equity investors and companies seeking to expand their business in a region with significant demand.
Established in 1996, the 600-bed Island Hospital provides specialty services including cardiology, clinical oncology, pediatrics and plastic surgery. It also offers a medical tourism hospital program catering to patients in Southeast Asia.
IHH is one of the world’s largest healthcare networks, with over 80 hospitals in 10 countries. The company has hospitals in China, Turkey, India and the Netherlands. Malaysian conglomerate Sunway operates three hospitals in Malaysia with a combined capacity of 1,730 beds.
One person said a deal with Affinity Equity Partners is expected to be completed by the third quarter of this year.
The sale of Island Hospital, which had been planned in 2020 but was postponed due to the pandemic, has been gaining traction again after the recently concluded $1.2 billion sale of Asia-focused private hospital group Ramsay Sime Darby Health Care.
That business, a 50-50 joint venture between Australian hospital operator Ramsay Health Care and Malaysian conglomerate Sime Darby, was sold to TPG-backed hospital operator Columbia Asia in November.
Some previous deals in the healthcare sector include TPG and Malaysian conglomerate Hong Leong Group’s acquisition of Columbia Asia Hospitals in Southeast Asia in 2019 in a transaction valued at $1.2 billion.
Affinity Equity Partners has $14.0 billion in assets and funds under management, with five offices in Asia and investments in 11 countries. Some of its investments include South Korea’s Shinhan Financial Group, Indonesian video-streaming service company Vidio, Australian food-and-beverage company Prime Foods and New Zealand’s Tegel Foods.
