Life Health­care sells stake in Max Health­care

Pretoria News - - BUSINESS REPORT - SANDILE MCHUNU [email protected]

LIFE Health­care has en­tered into an agree­ment with Ra­di­ant Life Care to dis­pose of its 49.7 per­cent stake in Max Health­care in In­dia.

The group said yes­ter­day that in terms of the agree­ment, Ra­di­ant will ac­quire the 49.7 per­cent stake held by Life Health­care for 80 ru­pees a share (R15.77 a share), equalling R3.9 bil­lion at hedged ex­change rates be­fore costs and taxes.

Life Health­care chief ex­ec­u­tive Dr Shrey Vi­ranna said the groups had en­tered into a share pur­chase agree­ment on De­cem­ber 24 last year and the deal was backed by lead­ing global in­vest­ment firm KKR.

KKR is a lead­ing global in­vest­ment firm that man­ages mul­ti­ple al­ter­na­tive as­set classes, in­clud­ing pri­vate eq­uity, en­ergy, in­fra­struc­ture, real es­tate and credit, with strate­gic man­ager part­ner­ships that man­age hedge funds.

“Ini­tially Life Health­care will use the funds to set­tle debt and grow South African com­ple­men­tary and di­ag­nos­tic ser­vices while build­ing an in­te­grated lo­cal of­fer­ing,” Vi­ranna said.

He added that in­ter­na­tion­ally, the group would also con­tinue to pur­sue its as­pi­ra­tions to be­come a global player with a fo­cus on op­er­a­tional ef­fi­cien­cies in di­ag­nos­tics and growth in ex­ist­ing mar­kets through se­lec­tive in­vest­ments.

The group has in­formed its share­hold­ers that the im­ple­men­ta­tion of the trans­ac­tion re­mains sub­ject to sev­eral con­di­tions, in­clud­ing the ap­proval of the com­pe­ti­tion au­thor­ity in In­dia. It added that the long stop date for clo­sure of the trans­ac­tion is at the end of May.

Life Health­care op­er­ates in South Africa and has a hos­pi­tal in Botswana. The group has an in­ter­na­tional pres­ence through Al­liance Med­i­cal Group (UK and Europe) and Scan­med SA in Poland.

Vi­ranna said Life Health­care’s strat­egy was evolv­ing away from de­liv­ery of acute hos­pi­tal care in emerg­ing mar­kets to­wards a much deeper ap­proach to in­te­grated health­care, lever­ag­ing off the di­ag­nos­tics ca­pa­bil­ity of Al­liance Med­i­cal Group.

“By con­clud­ing the Max Health­care trans­ac­tion it will en­able this strat­egy and al­low Life Health­care to fo­cus on its core op­er­a­tions in South Africa, the UK, Poland and Western Europe,” he said.

In the year to end Septem­ber re­sults, the group re­ported 12.9 per­cent in­crease in rev­enue to R23.5bn, with its UK sub­sidiary, Al­liance Med­i­cal Group, re­port­ing rev­enue growth of 30.8 per­cent to R5bn while nor­malised earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (Ebitda) in­creased by 27.9 per­cent to R1.16bn.

Life Health­care has set aside R2.6bn for the fi­nan­cial year 2019 for its cap­i­tal ex­pen­di­ture pro­gramme. Its shares closed 2.47 per­cent higher at R26.95 on the JSE yes­ter­day.


RA­DI­ANT Life Care will ac­quire the 49.7 per­cent stake held by Life Health­care for R15.77 a share, equalling R3.9 bil­lion at hedged ex­change rates be­fore costs and taxes. |

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