Asia healthcare assets risk overvaluation as private investors scoop them up

[SINGAPORE] As private equity (PE) investors pour money into Asian healthcare, some observers are concerned that this sector could soon overheat.

Some recent deals this year include KKR’s US$400 million purchase of a 54 per cent stake in India’s Healthcare Global Enterprises in February. In Singapore, another American PE firm TPG took Catalist-listed nursing operator Econ Healthcare private in a deal worth nearly S$88 million. When the proposed transaction was announced in February, the offer price represented a 20 per cent premium to Econ’s last traded share price on Jan 14.

“We are not the only ones to see the opportunity of healthcare in Asia, and, as a consequence, valuations can be high,” Abrar Mir, co-founder and managing partner of healthcare-focused PE firm Quadria Capital, told The Business Times.