Chinese firms bid for Australia’s top X-ray provider I-MED: sources

Two Chinese healthcare companies are among the bidders for Australia’s I-MED Radiology Network in a deal that could value the X-ray provider at more than A$1 billion ($765 million), people with knowledge of the matter said Wednesday.

Shenzhen-listed Tonghua Golden-Horse Pharmaceutical Industry and Hong Kong-listed Golden Meditech Holdings are likely to participate in a second round of bidding, three people told Reuters.

The Ontario Teachers’ Pension Plan, Canada’s third-largest public pension plan, and London-based private equity firm Permira, are also expected to submit separate bids, two of the people said.

Binding bids are due by end of this month.

Chinese interest in Australia’s biggest X-ray provider comes as the Chinese government strives to overhaul its healthcare sector and boost the competitiveness of the domestic industry in overseas markets, with acquisitions one of the key planks for that drive.

With nearly 200 clinics cross Australia, I-MED has 18 percent of the nation’s diagnostic imaging services market, which is partially subsidized by the government, according to a September report by researcher IBISWorld.

I-MED’s owner, Swedish private equity firm EQT Holdings, has hired Morgan Stanley and Rothschild to manage the sale process, the people said, who declined to be identified as the deal process is not public.

Representatives from Tonghua Golden-Horse, Golden Meditech, I-MED, Ontario Teacher’s Pension Plan and Rothschild did not respond to Reuters requests for comment. EQT, Morgan Stanley and Permira declined to comment.

I-MED booked A$608 million in sales and A$100 million in earnings before interest, tax, depreciation and amortization in its 2016 financial year.