Carlyle and TPG get clean bill of health for Healthscope acquisition

Australia’s Foreign Investment Review Board has approved the private equity consortium’s A$2.7bn bid for the healthcare operator.

Australia’s Foreign Investment Review Board has notified global private equity firms The Carlyle Group and TPG Capital that it has no objection to their A$2.7 billion bid for acquisition of hospital chain Healthscope.

In a statement, Healthscope said its directors continue to unanimously recommend that its shareholders vote in favour of the deal in the absence of a superior proposal. A shareholder meeting to vote on the deal is scheduled later this month on the 22nd.

“Subject to that same qualification, the directors intend to vote all Healthscope shares respectively held or controlled by them in favour of the scheme,” the company, which currently has a market value of about A$1.9 billion (€1.37 billion; $1.78 billion), said in the statement.

In July, Carlyle and TPG beat out a rival bid from Kohlberg Kravis Roberts, with their offer to pay A$6.26 per Healthscope share. At a value of A$2.7 billion, the deal marks the largest private equity transaction in Australia in two years. The consortium is paying A$1.99 billion for the company as well as assuming A$700 million of debt.

Initially, The Blackstone Group had also formed part of the Carlyle-TPG syndicate, but it withdrew from the bidding process for unspecified reasons in early July. KKR too had formerly bid for the healthcare operator in partnership with CVC Asia Pacific, but CVC pulled out of the partnership in June.

Healthscope is Australia’s second-largest hospital owner with branches spanning the country as well as facilities in New Zealand, Singapore and Malaysia. The company, which is listed on the Australian Securities Exchange, includes a medical centre division with more than 45 clinics and a diagnostic imaging division based in major hospitals.