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TPG Capital, Hong Leong in US$1.2b deal to buy hospitals in S-E Asia

Agreement with Columbia Asia includes 17 hospitals and one clinic with locations in Malaysia, Indonesia, Vietnam

Hong Kong

TPG Capital agreed to buy hospitals from Columbia Asia for US$1.2 billion with Malaysian conglomerate Hong Leong, as the global buyout firm boosts investments in companies driven by domestic consumption.

The deal includes 17 hospitals and one clinic with locations in Malaysia, Indonesia and Vietnam, according to a statement on Friday. Columbia Asia's 11 hospitals in India aren't part of the transaction, which is expected to close at the end of 2019. The buyers will each own 50 per cent of the acquired assets.

The deal marks TPG's re-entry into the hospital business in South-east Asia, and also represents the first foray into health care for billionaire Quek Leng Chan's Hong Leong.

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Investment firm Columbia Pacific Management had been considering selling Columbia Asia for as much as US$2 billion, sources said in November, when Bloomberg News first reported on the sale.

Rising incomes and ageing populations in Asia's largest markets, China and India, have resulted in increasing demand for healthcare services, spurring deal activities including some led by private equity firms. A total of US$15.8 billion in healthcare buyouts was announced in the Asia-Pacific region in 2018, up from US$7.2 billion a year earlier, according to Bain & Co.

TPG has been active in healthcare and education investment in Asia. In July, the buyout firm sold United Family Healthcare, a private healthcare operator in China, in a US$1.3 billion transaction to New Frontier Corp, after exiting its investment in Cancer Treatment Services International to New York-listed Varian Medical Systems in May. TPG bought Healthscope's Asian pathology business in 2019.

Also last year, TPG was weighing an acquisition of Vietnam Australia International School, while KKR & Co this month announced a purchase of a majority stake in EuroKids International in India.

Back in 2010, TPG sold its stake in Singapore-based Parkway Holdings, then Asia's biggest hospital operator, in a transaction that returned five times the money the private equity firm invested, a person with knowledge of the matter had said. BLOOMBERG