TPG, Carlyle eye $2.4 billion IPO for Australia's Healthscope: source

Fri Jun 20, 2014 3:47am EDT
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By Stephen Aldred

HONG KONG (Reuters) - Buyout firms TPG Capital and Carlyle Group are targeting a $2.4 billion initial public offering of shares in Australia's Healthscope Ltd as their most-favored option for the country's second-biggest private hospitals operator, a source with direct knowledge of plans told Reuters.

Amid a banner year for Australian IPOs, stoked by Sydney's buoyant stock market, a listing of that size would be the country's third-largest ever, according to Thomson Reuters data. It would also underline the growing appeal of the sector a country where healthcare spending is growing over 8 percent annually, according to Healthscope.

The firm's two 50-50 owners, who bought Healthscope in 2010 for A$1.99 billion ($1.73 billion at the time), are on a roadshow in Asia, the person said, lining up institutions who will commit to buy shares in the IPO known as 'cornerstone' investors. Attaching cornerstone investors, designed to encourage others to also put their money in, is unusual for an Australian listing, but common in Asia.

If successful, an IPO prospectus for Healthscope, which owns 44 private hospitals in Australia, would be filed by end-June or early July, said the person. The source could not be named as discussions on the listing are private.

TPG and Carlyle have explored three options as they looked to cash in on strong demand for quality healthcare assets, according to the source: a listing, a sale to a trade buyer, or a spin-off of property assets via a trust.

With Sydney's benchmark index up 14 percent over the last 12 months, and Australia's IPO market booming, Healthscope's owners now favor a listing, the source said. Proceeds from IPOs are $4.2 billion so far this year, while for the comparable period in each of the previous six years, a combined $3.6 billion was raised, according to Thomson Reuters data.

A final decision to formally trigger the share sale process has yet to be made, the person said. An external spokeswoman representing all three firms - TPG, Carlyle and Healthscope - declined to comment.


A general view of the lobby outside of the Carlyle Group offices in Washington, May 3, 2012.   REUTERS/Jonathan Ernst