Malaysian private equity firm Navis Capital Partners has acquired a stake in Tawada Healthcare, one of the largest medical device distributors in Indonesia.
Tawada offers a wide variety of equipment such as X-ray machines, ultrasound machines, laboratory equipment, orthopaedic instruments and laparoscopy towers.
Nicholas Bloy, co-managing partner at Malaysia-based Navis told Private Equity International sister title Private Healthcare Investor the growth plan was three-fold.
“[The growth plan is to] gain market share for our existing principals, to add new principals in areas that do not overlap with our existing principals and to acquire certain specific distributors whose principals will benefit from our nationwide relationships and assets.”
Navis said M&A targets would be domestic and, possibly, throughout the region. Bloy said the firm has already reviewed “approximately twenty targets”.
Tawada has a nationwide network of 13 offices and warehouses, over 320 employees and 2,000 customers including hospitals, clinics, laboratories, and private practices. Clients include Siemens, Samsung, Medtronic, and Smith & Nephew.
Navis said the medical equipment industry in Indonesia is expected to grow at a compound annual growth rate of 15 to 20 per cent over the next five years, fuelled by the rollout of a government-backed universal healthcare and insurance scheme, and the increasing affluence of the population.
Bloy said the firm targeted Tawada because the company “is our best angle for participating in Indonesia's growth. We have looked at private hospital operators and pharmacy players, but we have found their valuation expectations to be unrealistic.”
The deal was made from Kuala Lumpur-headquartered Navis' Asia Fund VII, a $1.5 billion vehicle investing across Southeast Asia.