TPG, Carlyle launch A$2.57bn Healthscope IPO

The firms will make a partial exit from the Australian healthcare firm.

Private equity firms TPG and The Carlyle Group have launched the initial public offering of Healthscope, an Australian private healthcare provider, issuing up to 1.89 billion shares on the Australian Stock Exchange, according to the IPO prospectus filed.

Healthscope expects to raise between A$2.2 billion (€1.5 billion; $2.1 billion) and A$2.57 billion, at an indicative price of A$1.76 to $2.29 per share.

The holding company managed by TPG and Carlyle funds could reduce its stake to as little as 25 percent, although reserves the right to retain 40 percent. However, the firms are expected to hold a 32.5 percent interest post-offer, down from its original 100 percent stake.

TPG and Carlyle had previously considered a strategic sale of the company, which they bought for about A$1.7 billion about four years ago, media reported earlier. Hospital Corp of America, China's Shanghai Fosun Pharmaceutical and Malaysia's IHH Healthcare were all linked to a potential acquisition.

However, the decision to go IPO in Australia comes as the market picks up and private equity firms take advantage of the exit route.

This week, Pacific Equity Partners sold down its interest in toilet paper and feminine hygiene products maker Asaleo Care on the Australian Stock Exchange, divesting its 49.5 percent stake for about A$320 million in an IPO that raised the Australia and New Zealand firm about A$656 million.

In May, the firm had success off the back of Australia’s largest listing in 2014, the sale of Spotless Group shares on the ASX, which raised about A$900 million.

TPG and Carlyle’s sale of Healthscope is expected to be the largest IPO on the ASX in years.

The proceeds from the offer will be used to repay existing liabilities, fund the redemption of Healthscope notes, which includes the repayment of existing senior debt facilities and repayment of shareholder loans provided by TPG and Carlyle, and the cost of the IPO.