Mitsui, Carlyle place bids for Hong Kong's Quality Healthcare - sources

By Saeed Azhar and Stephen Aldred

REUTERS - Japan's Mitsui & Co <8031.T> and U.S. private equity firm Carlyle Group have submitted preliminary bids for Quality Healthcare Medical Services, which is being sold by India's Fortis Healthcare and is valued at around $300 million, people familiar with the matter said.

Established in 1868, Quality Healthcare is the largest provider of healthcare services to corporations in Hong Kong, with a network of 50 medical centres, more than 500 affiliated clinics and more than 20 dental and physiotherapy centres.

At least 10 suitors submitted bids by last week's deadline, including buyout firm Advent International and other companies, one of the persons with direct knowledge of the matter told Reuters.

 

The suitors are attracted by the opportunity to invest in private healthcare in China, which is one of the areas that is consistently growing. JPMorgan is advising the seller, sources said. JPMorgan declined to comment.

Mitsui and Carlyle declined to comment and Advent also did not comment. A Fortis spokesman in India declined to comment.

Quality Healthcare was bought by a vehicle owned by Malvinder Mohan Singh and his brother Shivinder in October 2010 for HK$1.5 billion or about $190 million. In 2011, Fortis Healthcare had acquired all the international operations of the family business.

The sources declined to be identified as the discussions were confidential.

A bid by Mitsui, which also owns about 20 percent stake in Malaysia's state investor Khazanah-backed IHH Healthcare , is in line with other Japanese companies that have stepped up their overseas acquisitions.

The sale comes as Fortis scales back its international presence to focus on its home market and pare down debt after an acquisition spree that saw the company buy hospital and medical service firms in Singapore, Hong Kong, Vietnam and Australia.

Private equity firm TPG Capital and Singapore tycoon Peter Lim's Thomson Medical were also weighing a bid for the business, but it was unclear if they actually submitted one. A spokeswoman for Lim declined to comment while TPG wasn't immediately available to comment.

Earlier this year Fortis sold its Australian unit, Dental Corp, for A$270 million and has agreed to sell its Vietnam unit for $80 million to Singapore-based Chandler Corp.

The firm currently has a listed arm in Singapore, Religare Health Trust , which owns hospital-related assets managed by India's Fortis.

The India-listed flagship firm Fortis suffered a loss of 2.2 billion Indian rupees in the first quarter, hit by higher operating costs, interest expenses and a one-time foreign exchange loss.

(Additional reporting Yuka Obayashi in TOKYO and Kaustubh Kulkarni in MUMBAI; Editing by Denny Thomas and Matt Driskill)