GIC said to pay S$1.4b for 15% of Brazil's Rede D'Or

[SAO PAULO] GIC, Singapore's sovereign wealth fund, paid about 3.2 billion reais (S$1.4 billion) for a 15.2 per cent stake in Brazilian medical-care provider Rede D'Or Sao Luiz SA, according to two people with direct knowledge of the matter.

GIC acquired half the stake from the company's founding Moll family and the rest from Grupo BTG Pactual, the people said, asking not to be identified because the terms aren't public. The deal was signed Wednesday, the people said.

A representative of GIC confirmed it's making an investment in Rede D'Or but declined to comment on terms. BTG said in a regulatory filing that it sold a stake for 1.6 billion reais without specifying the size of the holding. Spokespeople for BTG and Rede D'Or declined to comment further.

Founded as a health-diagnostics laboratory in 1977 by cardiologist Jorge Moll, Rede D'Or now ranks among the country's biggest hospital operators with 4,500 beds across more than 27 locations. Carlyle Group LP separately acquired 8.3 per cent of Rede D'Or for about 1.75 billion reais, a person with knowledge of the matter said last month.

Private-equity firms and sovereign wealth funds are seeking hospital investments after a new law opened the way for 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 its middle-class when rising commodity prices fuelled an economic boom.

Rede D'Or's value has surged in the past five years, making Mr 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 stood at 23.6 per cent and now totals 16 per cent. The Moll family maintains control with about 62.4 percent of the company, according to the people.

Other medical-care firms in Brazil have drawn foreign interest, with funds including KKR & Co, Advent International Corp. and Apax Partners seeking hospital investments.

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.

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

BLOOMBERG