GIC, private equity giant KKR buy 42.5% stake in Philippines' top hospital chain for $938m

The sale to the KKR-led consortium, which values the whole unit at 83 billion pesos (S$2.2 billion), had drawn interest from buyout firms because of strong healthcare spending in South-east Asia.
The sale to the KKR-led consortium, which values the whole unit at 83 billion pesos (S$2.2 billion), had drawn interest from buyout firms because of strong healthcare spending in South-east Asia.PHOTO: REUTERS

MANILA (REUTERS) - Philippines' Metro Pacific Investments said on Tuesday (Oct 15) that it is selling a 42.5 per cent stake in the country's largest hospital chain for 35.3 billion pesos (S$937.6 million) to a consortium comprising private equity firm KKR & Co and an affiliate of Singapore's sovereign wealth fund GIC.

GIC will restructure its current investment in Metro Pacific Hospital Holdings (Metro Pacific Hospitals) and will re-invest alongside KKR.

Metro Pacific also said it was postponing a previously flagged US$1.6 billion (S$2.19 billion) initial public offering for Metro Pacific Hospitals, which operates 14 hospitals, many of which are among the largest and most modern in the Philippines.

The sale to the KKR-led consortium, which values the whole unit at 83 billion pesos, had drawn interest from buyout firms because of strong healthcare spending in South-east Asia.

The cash infusion will enable the company to hit its target of growing its network to 30 hospitals with 5,000 beds before 2030, Mr Augusto Palisoc, president of the healthcare group, said in a statement.

Under the deal, the KKR-led consortium will acquire 5.2 billion pesos worth of shares in the hospital business. It will also invest 30.1 billion pesos for convertible bonds that will be swopped for Metro Pacific's hospital shares in the next decade. Metro Pacific expects to close the deal by the end of the year.

Metro Pacific had earlier pursued a dual track process to reduce its holding in the hospital chain and raise cash for debt payments. It announced plans to sell a minority stake in August, followed by a September filing to conduct an up to US$1.6 billion initial public offering.

Reuters reported last month that KKR was among the suitors who advanced to the second round of the bidding process.

KKR has already had dealings with the extended group of companies that are units of First Pacific Co, which is owned by Indonesian tycoon Anthoni Salim. In 2018, it and Chinese tech giant Tencent Holdings acquired a minority stake in the financial technology arm of Philippines' PLDT Inc.