CVC to sell Affinity for A$1.4bn

The Asia Pacific arm of CVC is poised to exit its investment in the Australian private hospital operator 18 months after acquiring it.

CVC Asia Pacific and two other private equity investors have agreed to sell Australian hospital operator Affinity Health to Ramsay Health Care for A$1.4 billion (€850 million; $1.1 billion), according to Reuters.

 

CVC led the consortium comprising Australian private equity firm Ironbridge Capital and the Government of Singapore Investment Corp in the October 2003 acquisition of Affinity. The group paid $813 million to Mayne Group, beating off interest from Ramsay Health Care at that time.

 

The consortium had been exploring a number of options for the disposal of Affinity, including an IPO that would have been one of Australia’s largest flotations of the year.

 

The market for healthcare stocks is extremely strong

Andrew Cummins, head of CVC Asia Pacific

 

The report said that Ramsay intends to fund the acquisition through a A$190 million rights issue, a A$260 million preference share offer and A$643 million in bank debt. The company will also sell 14 hospitals back to CVC and Ironbridge for A$406 million in order to avoid competition issues.

 

Andrew Cummins, head of CVC Asia Pacific in Hong Kong, said that Affinity had been an excellent investment, but that this was a good time to sell: “The market for healthcare stocks is extremely strong,” he told The Deal.

 

In March, CVC Capital Partners agreed the sale of the bulk of its remaining holding in Australia’s Amatek to New Zealand building products company Fletcher Building for A$530 million.

 

When CVC acquired the whole of Amatek for A$1 billion from BTR Nylex seven years ago, it was the largest LBO completed in Australia.