Affinity Equity Partners to start bidding for Penang’s Island Hospital valued at RM4b — WSJ

KUALA LUMPUR (Feb 28): Buyout firm Affinity Equity Partners will start a bidding process in April for the sale of Penang-based Island Hospital, one of Malaysia’s largest healthcare providers, which is likely to fetch more than US$800 million (RM3.81 billion).

Citing people familiar with the process, the Wall Street Journal (WSJ) on Monday reported that one of the people said foreign and domestic companies, as well as some international private-equity firms, had expressed interest in buying Island Hospital.

It said the asset is likely to be valued at RM4 billion, according to the sources.

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The WSJ said the sale, which was being planned in 2020 but didn’t move ahead due to the Covid-19 pandemic, is gaining traction again, after the recently concluded US$1.2 billion sale of Asia-focused private-hospital group Ramsay Sime Darby Health Care.

Ramsay Sime Darby Health Care, a 50-50 joint venture between Australian hospital operator Ramsay Health Care and Malaysian conglomerate Sime Darby Bhd, was sold to TPG-backed hospital operator Columbia Asia in November.

Meanwhile, the 600-bed Island Hospital provides specialty services, including cardiology, clinical oncology, pediatrics, and plastic surgery. It also offers a medical-tourism hospital programme catering to patients in Southeast Asia.

The WSJ said one of the people said that given the interest in the region’s healthcare sector, the sale of the hospital will likely be concluded in four to six months.

The healthcare sector remains an attractive market for private-equity investors and other companies seeking to expand their business, especially in Asia, where there is significant demand. In 2019, TPG and Malaysian conglomerate Hong Leong Group acquired Columbia Asia Hospitals in Southeast Asia in a transaction valued at US$1.2 billion.

On the whole, Affinity Equity Partners has US$14 billion in assets and funds under management, with five offices in Asia and investments in 11 countries.

Its investments include South Korea’s Shinhan Financial Group, Indonesian video-streaming service company Vidio, Australian food and beverage company Prime Foods, and New Zealand’s Tegel Foods.

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