KUALA LUMPUR: Hong Leong Financial Group Bhd (HLFG) and private equity firm TPG inked a share purchase agreement to acquire Columbia Asia Hospitals in South East Asia for US$1.2 billion.
In total, Hong Leong and TPG will acquire 17 Columbia Asia hospitals with a breakdown of 12 hospitals Malaysia, three hospitals in Indonesia and two hospitals and a clinic in Vietnam.
The transaction is expected to be completed by the end of 2019.
However, the 11 hospitals in India are not a part of the transaction and will continue to operate with no changes under the existing ownership of International Columbia US, LLC, which is managed by Seattle-based Columbia Pacific Management.
"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.
"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," said HLFG finance director Soon Seong Keat said in a joint statement today.
Columbia Asia Hospitals serve Asia’s rapidly growing middle-income population with a unique business model delivering accessible, affordable and quality healthcare.
TPG senior adviser Tunku Ali Redhauddin said both parties see a compelling opportunity for Columbia Asia Hospitals to expand and scale regionally as Asia’s healthcare market continues to grow significantly.
"Columbia Asia Hospitals provide 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,” he said.
Columbia Pacific Management (CPM) managing director Nate McLemore said Columbia Asia Hospitals’ business model to growing middle-class population is highly scalable, will only get strengthened with Hong Leong and TPG’s market expertise, business insights and overall management capabilities.
“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.
“We look forward to partnering with these two world class organizations to continue to grow and expand the Columbia Asia platform,” he said.
Based in Seattle, CPM oversees an international healthcare business that develops and operates hospitals, clinics and senior living around the world.
It will continue to hold a minority interest in Columbia Asia Hospitals through International Columbia US LLC.
Columbia Asia Hospitals group chief financial officer Dilip Kadambi said over the last 20 year the healthcare provider have been serving the community by building and operating 18 healthcare facilities with 1,494 beds across these three countries in Southeast Asia.
“Healthcare is hugely underserved in the South East Asian markets that we operate in. Under the aegis of Hong Leong and TPG, we will continue to scale this platform further,” he said.
Dilip said the company now have nine ongoing projects adding an additional bed capacity of 898 in Southeast Asia at various stages of development.
“With this expansion and growth baked into the company, we are looking forward to continue delivering care to our communities the 'Columbia Asia' way,” he said.
Morgan Stanley Asia (Singapore) Pte. acted as exclusive financial advisor to CPM on the transaction.