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Fullerton Health to raise S$300m in proposed SGX listing

Singapore-based regional group, which has 200 clinics, facilities and 8,000 associate units, said to have S$1.5b pro forma market cap

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In what could be one of the biggest initial public offerings (IPOs) in more than a year, managed healthcare provider Fullerton Health is said to be seeking to raise some S$300 million through a listing on the local bourse.


IN WHAT could be one of the biggest initial public offerings (IPOs) in more than a year, managed healthcare provider Fullerton Health is said to be seeking to raise some S$300 million through a listing on the local bourse.

The group - which owns almost 200 clinics and facilities straddling the Asia-Pacific - is understood to have a pro forma market capitalisation of about S$1.5 billion under the proposed deal, making it the third largest healthcare outfit after IHH Healthcare Bhd and Raffles Medical Group (RMG), market sources told The Business Times.

Formerly known as Fullerton Healthcare, the company is widely expected to be priced in line with, or at a premium to, its competitors IHH and RMG, sources said.

As of Tuesday, IHH's PE ratio is about 56, while RMG's is 39 or so. Based on Monday's figures stated on the Singapore Exchange (SGX) website, IHH's EV/Ebitda or enterprise value divided by earnings before interest, tax, depreciation, and amortisation, is 26.84, while RMG's is 8.775.

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BT understands that about a third of the shares to be issued could be allotted to global cornerstone investors, given the strong reception received from this segment of the market.

The group is likely to offer 20 to 25 per cent of shares for public investors, and trading could take place as early as June. JP Morgan, UBS, Credit Suisse and DBS are understood to be the main banks arranging the deal.

James Koh, analyst at RHB Research Institute Singapore, said healthcare is generally seen as a growth sector structurally and there is still an appetite for such listings. "I think a new (healthcare) listing would command between 15-25 times price-earnings (PE) ratio depending on the quality of the company and growth plans."

UOB Kay Hian research head Andrew Chow said demand for such listings should be strong, "assuming reasonable valuation of the healthcare IPO". He added that healthcare stocks have generally performed well but noted that it is "a reflection of the resilience of the sector as well as scarcity value, particularly for stocks that execute well".

Fullerton's move to list is said to be part of the group's wider plans to expand further, and the proceeds raised are expected to be used to fund the group's regional expansion.

It was founded in 2011 by its chief executive Michael Tan and deputy chief executive Daniel Chan through an initial investment in corporate healthcare providers Gethin-Jones and Drs Trythall Hoy Davies, which have been around since the 1950s with 10 clinics and 70 staff then.

Within a span of six years, the Singapore-based healthcare provider managed to grow its footprint through Malaysia, Indonesia, Australia and Hong Kong.

In the past four years, the group made more than 20 acquisitions in the region, with growth driven both organically and via acquisitions. Last May, the company made a S$111 million purchase of radiology scan provider Radlink-Asia, and in August 2015, it completed another acquisition in which it gained a majority stake in Hong Kong medical network HMMP Ltd.

The group now comprises close to 200 wholly-owned clinics and facilities in the Asia-Pacific region with a staff of 400 doctors and 700 nurses, on top of its network of 8,000 associate hospitals and clinics. If the IPO goes through, Fullerton Health will be among the largest offerings on SGX since January 2015, after Manulife US Reit's US$470 million share sale announced last week and Keppel Infrastructure Trust's S$412.3 million offering announced last May. Frasers Centrepoint is also said to be planning a Reit listing of its Australian properties worth up to S$900 million.

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