CVC Asia Pacific, the Asian wing of global buyout firm CVC Capital Partners, will divest its 70 percent stake in an I-Med subsidiary, according to a source familiar with the matter.
CVC declined to comment or to identify the subsidiary in question, though a Reuters report said the firm is selling I-Med’s oncology and cardiology diagnostic business to help the company pay down debt.
I-Med operates more than 220 diagnostic imaging clinics in Australia as well as I-TeleRAD, a teleradiology reporting service.
Assuming a multiple of about six to seven times cash flow, the unit could fetch between A$180 million and A$210 million, Brent Mitchell, an analayst with Australian brokerage Shaw Stockbroking, told Reuters.
The sale will come stapled with an A$160 million ($112 million; €82 million) loan, structured as leveraged financing over three years. Four banks will each commit A$40 million to the loan: Australia & New Zealand Banking Group, BOS International Australia, nabCapital and Westpac Banking. The loan comprises A$75 million of acquisition debt with the remainder to be used for future add-on acquisitions and working capital, the source said.
Swiss bank UBS is advising the firm on the sale.
CVC Asia Pacific acquired DCA, I-Med’s parent for A$2.7 billion in October 2006. The deal was reportedly backed by an A$1.4 billion senior leveraged loan arranged by banks including Goldman Sachs Credit Partners and BOS International.
Some of CVC Asia Pacific’s Australian portfolio companies have struggled amid the financial crisis. In January, travel and hospitality business Stella Group was reportedly in talks with bankers about the repayment of A$860 million, after breaching the terms of one of its lending facilities. In November 2008, the firm agreed to inject A$335 million into media group PBL Media, as part of an A$445 million recapitalisation to banks, in order to relax debt covenants on the group.