External view of Island Hospital – Macalister Wing
KUALA LUMPUR: IHH Healthcare Bhd
has proposed to acquire a 100% stake in Penang-based Island Hospital Sdn Bhd (IHSB), which has 600 beds, for RM3.92bil cash.
In a filing with Bursa Malaysia, IHH said its indirectly wholly-owned subsidiary, Pantai Holdings Sdn Bhd (PHSB) entered into a sale and purchase agreement with Comprehensive Care Sdn Bhd (CCSB), a company established and majority-controlled by leading Asian private equity firm Affinity Equity Partner, for the proposed acquisition.
The proposed acquisition entails PHSB acquiring 20 million shares in IHSB, representing the entire equity interest for RM3.92bil cash, while IHSB and its subsidiaries have an estimated net debt of RM276.3mil as of June 30, 2024.
Upon completion of the proposed acquisition, PHSB will be the holding company of IHSB Group.
IHH stated that the proposed acquisition will be funded through a combination of internal funds and external borrowings, with the exact proportions still to be determined.
Group chief executive officer Dr Prem Kumar Nair said IHSB presents a transformative opportunity for IHH in Malaysia.
“Its leading position in Penang, extensive specialist pool and clinical offerings, as well as its status as the hospital of choice for foreign patients, make it an asset that complements our growth plans in the country.
“Together, we will leverage and build on our shared leadership in clinical and care excellence to better serve the needs of both local and foreign patients in Penang and Malaysia.
“We expect significant synergies from the transaction and a unique opportunity to elevate Island Hospital as a leading integrated medical facility in Asia. In keeping with our “ACE” framework, we will continue to drive sustainable growth in Malaysia and across our global network to deliver value for our stakeholders,” he added.
IHH expects more than RM200mil in synergies over the next five years following the acquisition. By aligning on commercial practices and operations with IHH, including consolidating procurement, IHSB can enhance efficiency in its operations.
IHSB holds a landbank valued at RM223.4mil, with approvals in place for future development. This will secure IHH’s growth in the region and address the rising healthcare demand from both local and international patients.
