CVC Asia-Pacific has pulled out of a $1.5 billion joint bid with Kohlberg Kravis Roberts for Melbourne-based hospital operator Healthscope. KKR continues to maintain a strong interest in Healthscope and is now bidding alone, a spokesman for the firm said.
It has not been made clear why CVC decided not to continue with the joint bid and the firm could not be reached by press time.
KKR is now pitted against another private equity consortium that is also vying for Healthscope. That consortium initially comprised only of The Carlyle Group and TPG Capital, but has also since seen The Blackstone Group join. The bidders were granted permission to conduct due diligence on Healthscope in late May. The process is due to be completed in mid-July, according to Reuters.
If the deal is successfully completed, it will be the largest private equity transaction in two years in Australia.
Healthscope is Australia's second-largest hospital owner in Australia with branches spanning the country as well as facilities in New Zealand, Singapore and Malaysia. The company includes a medical centres division with over 45 clinics and a diagnostic imaging division centred in major hospitals.
Tenet Healthcare, a trade buyer, was also initially involved in the bidding process but subsequently pulled out.
Investors are showing increasing interest in Asia’s healthcare sector. Also in Australia, earlier this month, mid-market investor The Riverside Company made an undisclosed size investment in Australian Medico Legal Services, a Melbourne-based provider of independent medical assessments and advisory services which are used by insurance organisations, corporations, government and legal entities to resolve contentious healthcare decisions.
Further afield, this week global private equity firm Warburg Pincus said it is investing $85 million in Metropolis Healthcare, a chain of diagnostic laboratories in India.
There is also an ongoing bidding war between Malaysian sovereign fund Khazanah and India’s Fortis Healthcare for a majority stake in former TPG portfolio company Parkway Holdings, a Singapore-headquartered chain of private hospitals with facilities in Malaysia, Brunei, India, China and the United Arab Emirates.