PRIVATE hospital operator Healthscope has gone to the market to raise $140 million after a recently announced boost in profits.
Healthscope said the institutional placement of new ordinary shares would be used to fund acquisitions, as well as pay for recently acquired Healthcare of Australia Holdings.
Allens Arthur Robinson has acted for Healthscope on the deal. Melbourne-based partner Cameron Price, with lawyers Brooke Griffin and Xinmin Pang, advised on all legal and regulatory aspects of the institutional placement and the share purchase plan.
Freehills acted for Goldman Sachs JB WEre, the underwriter on the placement.
The transaction comprises a fully underwritten institutional placement, which opened on 26 August 2009, and will be followed by an offering to retail shareholders in Australia and New Zealand with an opportunity to subscribe for up to A$15,000 of new Healthscope shares under a share purchase plan.
The capital raised from the transaction will go towards Healthscope's plans for the expansion of hospitals, funding for recent acquisitions of pathology and medical centres - including its recent acquisition of Analytical Reference Laboratories - and to provide flexibility to pursue future acquisition opportunities.
Allens partner Price said: "'The healthcare sector has been resilient during these difficult economic times, and the equity markets have recently been showing signs that they are prepared to fund appropriate growth plans. This equity raising will give Healthscope some flexibility to pursue future acquisition opportunities.'
The issue price for the institutional placement will be determined by a bookbuild and the share purchase plan will be offered in accordance with the new ASIC Class Order 09/425, which permits companies to offer up to A$15,000 of shares to each shareholder under a share purchase plan.
The announced deal comes as rival private heath group Ramsay Health Care Ltd is poised to announce a $200 million capital raising when it releases its annual results.
According to The Australian Financial Review, it is thought that the company was preparing a capital raising on Wednesday night this week. But the newspaper reported that private hospital group chairman and founder Paul Ramsay is believed to be opposed to his 42 per cent stake being diluted.