HONG KONG: Hong Kong-based multinational Li and Fung Ltd is considering options for its Asian healthcare arm, including a sale, that could value the business at up to US$500mil (RM2.17bil), two people with direct knowledge of the matter say.
The sources said Li and Fung has asked banks to pitch options for IDS Medical Systems Group (idsMED), which provides integrated solutions for medical equipment, supplies and services. According to the sources, discussions are still in the early stages and no decision has been made.
The options could also include an initial public offering, said one of the sources, both of whom declined to be identified as the discussions were confidential.
The Li and Fung arm, which operates in Singapore, Malaysia, Indonesia, Hong Kong, the Philippines, Thailand, China, Taiwan and Vietnam, could be valued at US$400mil (RM1.73bil) to US$500mil (RM2.17bil) in a deal, they said.
Li and Fung and idsMED did not respond to email requests for comment yesterday.
The potential sale comes at a time when medical services companies are gaining favour as investors bet on the healthcare sector’s ability to weather the current challenging economic environment.
In December, India’s Suven Pharmaceuticals announced that US private equity firm Advent International would buy a 50.1% stake from its promoter Jasti family and consider merging it with a peer.
A week earlier, private equity giant KKR & Co announced that it would acquire Japanese drug developer Bushu Pharmaceuticals from Hong Kong’s BPEA EQT.
Founded in 2011, partly by a Li and Fung Group executive, idsMED started doing business in South-East Asia. According to its website, it has since attracted strategic investors such as Singapore-based venture capital firm EDBI, the World Bank’s International Finance Corporation, and Japanese trading house Mitsubishi Corp, as well as expanded into Greater China.
The website shows that it counts over 10,000 healthcare facilities as clients and employs 1,800 people. — Reuters
