TPG and Hong Leong to acquire Columbia Asia hospitals for $1.2bn

December 2019 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

December 2019 Issue

In a deal that will help grow Columbia Asia Hospitals’ footprint across South East Asia, conglomerate Hong Leong Group and global alternative asset firm TPG are to acquire 17 of the healthcare group’s hospitals and one of its clinics for an estimated $1.2bn.

The transaction will see Hong Leong and TPG acquire 12 hospitals in Malaysia, three in Indonesia and two in Vietnam, as well as a clinic. Columbia Asia Hospitals’ 11 hospitals in India are not a part of the transaction and will continue to operate with no changes.

With 14 listed companies in various stock exchanges around the world and a workforce of over 43,000 employees, Hong Leong Group is one of the largest conglomerates based in Malaysia. Its diversified businesses include banking and financial services, manufacturing and distribution, property development and investment, and hospitality and leisure.

“We are extremely excited to be entering the healthcare space and believe Columbia Asia Hospitals, with its current scale and uniquely differentiated business model, offers the right platform to capture the robust healthcare growth in South East Asia,” said Soon Seong Keat, finance director at the Hong Leong Group. “We look forward to partnering with TPG, which has a stellar track record as a healthcare investor, and to working closely with Columbia Asia Hospitals’ management team to accelerate its next phase of growth.”

A global alternative asset firm founded in 1992 with more than $111bn of assets under management (AUM), TPG’s investment platforms are across a wide range of asset classes, including private equity, growth venture, real estate, credit and public equity.

“As Asia’s healthcare market continues to grow significantly, we see a compelling opportunity for Columbia Asia Hospitals to expand and scale regionally,” said Tunku Ali Redhauddin, senior adviser at TPG. “Columbia Asia Hospitals provide accessible, affordable and high-quality care in several countries, operating under one cohesive, recognisable brand. We are excited by the group’s modern and innovative approach and look forward to working closely with Hong Leong and the hospital’s management team to continue to grow Columbia Asia Hospitals’ footprint across South East Asia.”

The transaction is expected to close at the end of 2019.

“Healthcare is hugely underserved in the South East Asian markets that we operate in,” said Dilip Kadambi, group chief financial officer and interim chief executive of Columbia Asia Hospitals. “Over the last 20 years we have been serving the community by building and operating 18 healthcare facilities, with 1494 beds across these three countries in South East Asia. Under the aegis of Hong Leong and TPG, we will continue to scale this platform further.

“We have nine ongoing projects adding an additional bed capacity of 898 in South East Asia at various stages of development,” he continues. “With this expansion and growth baked into the company, we are looking forward to continue delivering care to our communities the ‘Columbia Asia’ way.”

Acting as exclusive financial adviser to Columbia Pacific Management on the transaction was Morgan Stanley Asia (Singapore).

“We are proud of Columbia Asia Hospitals, and are pleased to have created and grown one of the strongest healthcare companies in the region over the last two decades,” concluded Nate McLemore, managing director of Columbia Asia Hospital’s parent company, Columbia Pacific Management. “We look forward to partnering with TPG and Hong Leong – two world class organisations – to continue to grow and expand the Columbia Asia platform.”

Fraser Tennant