Private hospital operator Healthscope has announced the $279 million sale of its Asian pathology business.
The sale to global private equity company TPG includes the company's pathology operations in Singapore, Malaysia and Vietnam.
Healthscope has been the subject of private equity takeover interest with a consortium of investment companies making a $4.1 billion unsolicited bid for the company in June.
It Asian pathology business consists of 39 laboratories operating under the Gribbles Pathology and Quest Laboratories brands.
The business contributed earnings of $18.2 million in FY17 and $9.6 million in 1H18. This represents approximately 4 per cent the company's total earnings.
Healthscope said it expects to book a gain on sale of approximately $165 million. It previously announced it was undertaking a strategic review of its Asian Pathology business.
"Having received a number of approaches to acquire the business, Healthscope commenced a sale process to assess the value that could be generated by a divestment of Asian Pathology," it said.
"The sale represents the successful conclusion of the strategic review. The net cash proceeds of the sale will be used to pay down debt and fund Healthscope’s expansion pipeline."
Healthscope managing director and CEO Gordon Ballantyne said, “We are pleased with the successful outcome of the strategic review, which realises significant value for Healthscope shareholders following a thorough and competitive sale process.
"The decision to divest will allow our management team to focus on our core operations. We thank the management and employees of the Asian Pathology operations for their hard work and dedication to their businesses and to Healthscope over the past many years. We will work closely with TPG to ensure a smooth transition."
According to Joel Thickins, TPG partner and head of Australia and New Zealand, “We are excited to acquire this very sought-after asset. Healthcare is a core sector specialty for TPG and this is a great example of having pan-Asian expertise to execute a cross border transaction in a core sector. Our primary ambition is to scale and grow the platform across Asia, as we are doing with a number of our other portfolio investments.”