Australia’s third largest private hospital operator, Healthe Care, plans to build more hospitals in Australia after being sold to China’s Luye Medical Group for $938 million.
The private hospital operator issued a statement on Sunday, confirming that majority owner private equity firm Archer Capital had sold it to Luye Medical.
The Financial Review reported on Sunday that the Chinese buyer beat private equity suitors Baring Private Equity Asia and Bain Capital with a final bid of $938 million.
Rival Australian operators Ramsay Health Care and Healthscope opted to drop out early in the sales process, which lasted several months.
Healthe Care chief executive Steve Atkins said the deal sets the company up to build more hospitals in Australia and expand into China.
“Luye Medical have bought into the growth plan that we pitched to them,” he said.
“The immediate aspiration is to open at least another two or three new hospitals over the next five years, and enter a range of public private partnerships at existing state-run sites”.
Luye Medical is a part of the multibillion-dollar privately owned Luye Group.
The company comprises a network of healthcare service facilities across major cities in China, focusing on key therapeutic areas including rehabilitation nursing, plastic surgery, geriatric medicine and dentistry.
The deal with Healthe Care is Luye’s first foray as a hospital owner anywhere in the world.
“I strongly believe that Healthe Care will provide us with a platform upon which we can build a world class and highly successful healthcare services business not only in Australia and China, but also in many other countries of Asia,” Luye Group chairman Liu Dian Bo said.
“This positions Luye Medical to consider a range of opportunities resulting from the recent free trade agreement with China, and capitalise on the company’s world class systems, patient care and operating standards”.
Mr Liu said his company was committed to supporting local standards of care.
“I see our role as to enhance and improve access to private healthcare services for Australians and we have the capital and commitment to fund expansion of Healthe Care’s hospitals to enable it to continue to bolster its position as one of the leading healthcare services companies in the country.”
Healthe Care was founded in 2004 with the backing of CHAMP Ventures, which sold its stake to Archer Capital for $230 million in 2011.
It owns and operates 17 private hospitals across Australia. The group has nearly 2,000 hospital beds, 50 operating theatres, and 4,500 employees.
Archer Capital added five sites to the group, including the newly opened Townsville Private. A new hospital on the Gold Coast is scheduled to open next year.
The sale to the Luye Group is subject to final approval from the Foreign Investment Review Board.
Mr Atkins said he saw no issue with getting regulatory approval given the large number of public and private hospital operators competing in the market.