Healthscope medical centres under microscope, PE targeted
Sarah Thompson, Anthony Macdonald, Joyce Moullakis
Private hospital owner Healthscope is testing buyer interest in its 50-odd medical centres, seeking a buyer which would be willing to pay about $100 million for the assets.
Street Talk understands Healthscope has approached potential buyers in recent weeks, to test their appetite in what is proving to be a challenging business for the hospital operator.
Healthscope reported medical centres’ revenue down 5.7 per cent and earnings off 13.5 per cent for the six months to December 31, while the wider group’s numbers were up 3.9 per cent and 5.1 per cent respectively.
While Healthscope does not disclose the exact quantum of medical centres revenue and earnings – except to say they contribute about 2 per cent of group earnings – sources said 10-times earnings would value the business at about $100 million.
Others, though, said Healthscope would be seeking a bid well above that mark.
Macquarie Capital is well placed to advise Healthscope should talks progress, having worked closely with the company through its relatively short listed life and under the former private equity owners.
However, it is understood Macquarie has yet to be mandated.
Boutique Field Research first flagged a potential sale of Healthscope’s medical centres on Monday morning, saying management changes in the unit had only encouraged speculation that the parent company was serious about divesting the division.
Healthscope owns 48 medical centres according to its most recent annual report, with sites in Victoria, New South Wales, ACT, Queensland and Western Australia, and making more than 2 million consultations a year.
The unit is expected to attract interest from domestic private equity firms already familiar with the sector, including Crescent Capital and Quadrant Private Equity. Healthscope sold its unprofitable Australian pathology business to Crescent for $105 million in 2015.
