Sonic Healthcare to buy some Healthscope assets

May 22, 2012

MELBOURNE –  Sonic Healthcare Ltd. announced that it is taking over some of private equity-owned Healthscope Ltd.’s Australian operations for US$99.4 million to expand its pathology business.

Sonic Chief Executive Colin Goldschmidt said in a statement the acquisition of the businesses in New South Wales, Queensland and Western Australia states and the Australian Capital Territory would be “value accretive” for shareholders.

Sydney-based Sonic is one of the world’s largest medical diagnostics companies, with operations in Australia, New Zealand, the U.S., Germany and the United Kingdom while Healthscope, based in Melbourne, operates hospitals in Australia and pathology services in Australia and New Zealand, Malaysia, Singapore and Vietnam.

Nomura analyst David Stanton said in a note that Healthscope was selling the businesses after it failed to achieve “critical mass” in those areas, despite an aggressive campaign to build market share.

Both companies said the deal was subject to regulatory approvals but was expected to be finalized by August.

Sonic said the businesses it was buying had combined annualized revenue of about A$105 million, with the acquisition to be funded from its existing debt facilities.

Healthscope Managing Director Robert Cooke said in a separate statement the company was selling the businesses after a strategic review of its Australian pathology business.

The company is keeping its pathology businesses in Victoria and South Australia states and the Northern Territory because it sees a strong future for them, he added.

“By focussing our efforts and resources in these regions, we are confident that we can further improve our market position by strengthening the delivery of quality pathology services,” Cooke said.

At 0330 GMT, Sonic shares were up 1.8% at A$12.76, while the benchmark S&P/ASX 200 index was down 2%.

Healthscope is owned by TPG Inc. and Carlyle Group

Category: Features, Technology & Devices

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