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GIC said to seek up to $1.3 billion stake in one of Brazil's biggest hospital operators

Wednesday, May 6, 2015 - 11:30
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Singapore sovereign wealth fund GIC is in talks to buy a stake worth as much as 3 billion reais (S$1.3 billion) in one of Brazil's biggest hospital operators Rede D'Or Sao Luiz SA, people with knowledge of the matter said.

[SAO PAOLO] Singapore sovereign wealth fund GIC is in talks to buy a stake worth as much as 3 billion reais (S$1.3 billion) in one of Brazil's biggest hospital operators Rede D'Or Sao Luiz SA, people with knowledge of the matter said.

GIC may acquire as much as 14 per cent of the hospital operator, in equal shares from the company's founding Moll family and Grupo BTG Pactual, the people said, asking not to be identified because the information is private. GIC could announce a deal for the stake within a month, the people said.

Founded as a health-diagnostics laboratory in 1977 by cardiologist Jorge Moll, Rede D'Or is now one of the country's biggest hospital operators with 4,500 beds across more than 27 locations. GIC would follow Carlyle Group in buying a stake in the company. Carlyle paid about 1.75 billion reais for 8.3 per cent of Rede D'Or, a person with knowledge of the matter said last month.

Spokesmen for GIC, BTG Pactual, Rede D'Or and the Moll family declined to comment.

Private-equity firms and sovereign wealth funds are looking for hospital investments after a new law allowed foreign ownership of health-care facilities in Latin America's largest economy. The nation is home to tens of millions of would-be patients who joined the country's middle-class when Brazil's economy was booming because of the rise in commodity prices.

Rede D'or's value has surged in the past five years, making Moll a billionaire with an estimated net worth of US$4.5 billion, according to the Bloomberg Billionaires Index. BTG acquired 25.6 per cent of the company in 2010 for 600 million reais, through convertible bonds, a person with knowledge of the matter said last month. After Carlyle's purchase, BTG's stake stands at almost 24 per cent, while the Moll family maintains control of the company.

Other medical-care firms in Brazil are also attracting foreign interest, with funds including KKR & Co., Advent International Corp. and Apax Partners all looking for hospital investments.

The planned acquisition is part of GIC's push into emerging markets. The fund in August said it's more positive on those economies as it seeks to benefit from growing middle classes, valuations and the progress in reforms.

GIC acquired an 18.5 per cent stake in Brazilian education company Abril Educacao SA, it said in August. Among other transactions in 2014 were leading a US$170 million investment in online sporting goods seller Netshoes and the purchase of 5.02 per cent of communications technology provider Linx SA.

GIC is the world's sixth-biggest state fund with an estimated US$315 billion of assets under management, according to the website of the London-based Institutional Investor's Sovereign Wealth Center.

BLOOMBERG