KKR-led group bids $15b for Australia’s Ramsay Health

Bloomberg: A consortium led by KKR & Co offered to buy Ramsay Health Care Ltd for A$20.1 billion ($15 billion), chasing a network of private hospitals across Australia and Europe treating millions of patients a year.

Investors led by the US private equity firm bid A$88 for each Ramsay share, the Sydney-based company said on Wednesday. That’s about a 37% premium to Ramsay shares’s closing price of A$64.39. Ramsay is letting the group carry out non-exclusive due diligence.

“The discussions between Ramsay and the consortium are preliminary in nature,” the company said. “There is no guarantee that any further proposal will be forthcoming.”

At an enterprise value of A$28 billion including debt, a deal would be Australia’s third largest on record, according to data compiled by Bloomberg. It would be KKR’s biggest ever acquisition in Asia Pacific, surpassing the $6.3 billion deal in 2015 for General Electric Co’s consumer finance business in Australia and New Zealand.

A takeover would extend a boom in acquisitions in Australia and New Zealand, which has notched up about $56.9 billion worth of deals in 2022, Bloomberg data show. That’s the best start to a year since 2007.

While Ramsay didn’t provide details of the KKR consortium, cashed-up pension funds in Australia have channeled money into assets that produce recurring income such as airports and toll roads.

The consortium’s offer for Ramsay exceeds the stock’s 2016 high of A$83.66. The shares are down about 10% this year.

Ramsay operates 72 private hospitals and day surgeries in Australia, making it the country’s largest private hospital operator, while running a network of more than 30 UK hospitals and day procedure centers. Ramsay also controls Ramsay Sante, which runs hundreds of clinics and primary care facilities across Europe, according to the company’s website.

Ramsay said it’s still exploring a potential sale of Ramsay Sime Darby — a joint venture with Malaysia’s Sime Darby Bhd. — which runs hospitals in Indonesia and Malaysia. One of the conditions of KKR’s offer is that Ramsay doesn’t sell any subsidiaries or properties.