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KKR pursues deal for US$4b French clinic chain Elsan

[ZURICH] KKR & Co is in talks about a potential acquisition of French clinic chain Elsan, according to people familiar with the matter.

The private equity firm is discussing a potential deal with Elsan's owner, CVC Capital Partners, as it seeks to preempt a planned bidding process for the company, the people said. A deal could value Elsan at about 3.5 billion euros (S$5.56 billion), according to the people, who asked not to be identified because the information is private.

Other suitors have also been studying potential bids for Elsan and there's no certainty KKR will be able to reach a deal, the people said. CVC plans to launch a broader sale process if it can't agree on terms of a transaction with KKR, the people said.

Representatives for KKR, CVC and Elsan declined to comment.

A deal would add to a string of recent acquisitions by US-based KKR, which has been the world's most active private equity acquirer by value during the coronavirus crisis, according to data compiled by Bloomberg. Keen to avoid missing out on the upside of a post-Covid economic recovery, KKR has spent almost US$22 billion since the beginning of March, the data show.

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KKR has been acting fast to win deals. In March, the firm beat out several private equity and infrastructure funds to buy Pennon Group's waste-management arm Viridor with a fully-financed offer early in the auction process.

Demand for quality health-care services has increased significantly amid the pandemic, prompting sellers to look at bringing such assets to market. IK Investment Partners Ltd. is considering a possible disposal of French nursing-home operator Colisee Group, people familiar with the matter said in March.

Paris-based Elsan operates more than 120 clinics and private hospitals across France, according to its website. The company employs 25,000 people, including 6,500 doctors. CVC, which acquired Elsan from private equity firms NiXEN Partners and 3i Group Plc in 2014, has been working with Morgan Stanley and Rothschild & Co to exit the business, Bloomberg News has reported.

A sale of the Elsan would add to the US$92 billion of deals involving health-care companies this year, Bloomberg data show.

CVC has been less active in deploying capital amid the virus pandemic. The firm completed a 21.3 billion-euro fundraising for its eighth flagship fund - its biggest ever - to invest in Europe and the US, people familiar with the matter said this month.

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