Private equity powerhouse KKR is selling its 45 percent stake in Australian healthcare provider GenesisCare to China Resources Group and Macquarie Capital in a deal that reportedly gives GenesisCare an enterprise value of A$1.7 billion ($1.3 billion; €1.2 billion).
Sydney-based GenesisCare is Australia's largest operator of cancer care, cardiology and sleep clinics. It has over 115 clinics and 30 treatment centres across the country and performs around 320,000 treatments each year.
Chinese state-owned conglomerate China Resources, based in Hong Kong, and Sydney-based investment group Macquarie are buying between 50-74 percent in the company, including KKR's full stake.
Current GenesisCare investors, which include its management and some of its staff, will continue to hold the remaining share in the company following the sale.
Other bidders for GenesisCare include a mix of private equity firms and financial services companies: The Carlyle Group and Bain Capital from the US and Chinese insurer Ping An Insurance reportedly participated in the auction.
GenesisCare's chairman David Vaux said the investment will be used to improve healthcare in new markets in Asia, including China, where there is a “significant appetite” for world class capabilities in cancer and cardiac care.
KKR bought 45 percent of GenesisCare in 2012 for an undisclosed sum through Asia Fund I, a 2007-vintage vehicle that raised $4 billion. Investors in the fund include the California Public Employees' Retirement System, Canada Pension Plan Investment Board and the Washington State Investment Board.
KKR's investment financed the company's expansion plans in Europe, including the acquisition of two cancer care providers, Madrid-headquartered IMOncology and Hampshire-based Cancer Partners UK. In March this year, GenesisCare entered into a multi-year A$132 million partnership with Swedish medical equipment manufacturer Elekta AB to acquire its radiotherapy solutions. It also signed a deal last year with Sydney-based Ramsay Health Care to launch new treatment centres in two hospitals in the UK.
KKR manages more than $126 billion of assets. Since 1995, the firm has invested more than $9 billion of equity capital in health care companies, it said on its website.
The transaction is subject to shareholder vote and Foreign Investment Review Board Approval.