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Healius sells primary care business to BGP Capital
Herbert Smith Freehills has advised Healius on the sale of its medical and dental centres business.
Tony Zhang
Firms: Herbert Smith Freehills (Healius); BGP Capital (Allens).
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Deal: Herbert Smith Freehills’ M&A team has advised Healius Limited on the sale of its medical and dental centres business, with an enterprise value of $500 million, to funds managed by BGH Capital.
Healius is a diversified healthcare business, with operations in pathology, diagnostic imaging, day hospitals and other emerging businesses as well as the operation of medical and dental centres.
Value: Undisclosed.
Area: Capital raise.
Key players: The Herbert Smith Freehills team was led by partner Brad Russell and executive counsel Francine Kinkade, and the core team included healthcare sector lead and partner Natalie Bryce, senior associates Dan Johnson and Tess Mierendorff, and solicitors George Psaltis, Alex Thams and Jonny Vaux.
They worked together with other specialists from the Herbert Smith Freehills employment, technology, intellectual property, and property teams, across the firm’s Sydney, Brisbane, and Melbourne offices.
Deal significance: Healius will retain day hospitals and IVF which currently sit within its medical centres division.
Healius will also continue to operate its existing pathology collection centres and imaging clinics located within the medical centres under long-term leases at rents that it called “consistent with current levels”.
“The successful sale of [medical centres] has been achieved at an attractive valuation for us, despite the challenging environment from the COVID-19 pandemic, testament to the quality of this business,” said Healius’ chief executive Malcolm Parmenter.
Reflecting the significant disruption in dental activities due to COVID-19 restrictions, up to $75 million of these proceeds may be deferred if the earnings of the dental clinics have not returned to pre-COVID-19 levels at the time of completion.
“We are delighted to have assisted Healius with this complex transaction,” Mr Russell said.
“The transaction presented a number of unique challenges and we valued being able to work these through with the experienced Healius team, led by Mark Ellis (general manager - corporate development) and John Natal (general manager – legal).
“Despite the difficult economic conditions, the healthcare sector continues to see activity, supported by both trade buyers and interest from private equity”.
