<article><a style="color: #000080;" href="http://dealstreetasia.com/tg/bain-capital" target="_blank">Bain Capital LLC</a> is is acquiring a controlling stake in the China-focused hospital operator <a style="color: #000080;" href="http://www.apmg.com.cn" target="_blank">Asia Pacific Medical Group (APMG)</a>, in the first deal for the private-equity firm’s new Asia fund.
Currently, Boston-based Bain Capital maintains $75 billion in assets under management (AUM) across a range of asset classes, which includes private equity, venture capital, public equity and credit products.</article>

<a style="color: #000080;" href="http://dealstreetasia.com/tg/bain-capital" target="_blank">Bain Capital LLC</a> is is acquiring a controlling stake in the China-focused hospital operator <a style="color: #000080;" href="http://www.apmg.com.cn" target="_blank">Asia Pacific Medical Group (APMG)</a>, in the first deal for the private-equity firm’s new Asia fund.
Currently, Boston-based Bain Capital maintains $75 billion in assets under management (AUM) across a range of asset classes, which includes private equity, venture capital, public equity and credit products.
Established in 1992, APMG provides a range of primary care and specialty services, with a focus on neurology and oncology. According to a release from Bain Capital, APMG introduced the first Gamma Knife machine to China and has since built a portfolio of five hospitals and clinics in China and other parts of Southeast Asia, while also partnering with leading hospitals in China to provide medical, research and technology services.
Citing people familiar with the deal, the Wall Street Journal <a style="color: #000080;" href="http://www.wsj.com/articles/bain-capital-makes-bet-on-an-aging-china-1458144181" target="_blank">reported</a> that the consideration for the stake in APMG is $150 million, with the funds to be used for financing expansion. The funds originate from $3 billion Asia-focused fund closed in December 2015, which targets investments in sectors like healthcare, consumer products and financial services.
Commenting on the investment, <a style="color: #000080;" href="http://www.bloomberg.com/research/stocks/private/person.asp?personId=25392745&amp;privcapId=30589163" target="_blank">Jonathan Zhu</a>, a managing director of Bain Capital Private Equity who was formerly with <a style="color: #000080;" href="http://dealstreetasia.com/tag/morgan-stanley" target="_blank">Morgan Stanley</a>, stated: &#8220;As one of the leading private healthcare companies in China, APMG is able to provide patients with quicker and affordable access to professional treatment.
Zhu added, &#8220;Bain Capital Private Equity’s long history of working with healthcare businesses and proven operational model will help enhance APMG’s leading position as a premium healthcare provider, particularly in the supply constrained neurology and oncology treatment market.”
China’s health-care sector is growing rapidly as the number of people over the age of 60 is estimated to double in the next 30 years, part of a larger global trend seeing the <a style="color: #000080;" href="http://www.nature.com/nature/journal/v451/n7179/full/nature06516.html" target="_blank">accelerated ageing of societies</a>. This is driving an increasing need for medical care &#8211; geriatric care in particular &#8211; as older Chinese use more services.
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As part of measures to ameliorate the problems posed by an ageing population, Beijing is also engaged in reforms such as liberalising its drug prices, privatising state-controlled hospitals and <a style="color: #000080;" href="http://www.reuters.com/article/us-china-politics-plenum-idUSKCN0SN16Y20151030" target="_blank">allowing couples to have two children</a>, as part of measures that could see investments in the healthcare sector generate robust dividends.
A <a style="color: #000080;" href="http://www.ecald.com/Portals/49/Docs/Publications/Ageing%20Aged%20Care%20China.pdf" target="_blank">1997 study</a> by the School of Healthcare Studies at Oxford Brookes University in the UK noted: &#8220;China’s population is rapidly ageing at a time when former socialist collective provision and provision by the state in all sectors, especially in social welfare, is being radically reduced because of economic reform and financial stringency.&#8221;
Traditionally, family care for elderly members is encouraged amongst Chinese families but has been disrupted due to both a changing economic context, smaller family sizes and domestic migration as people move around for work. This is coupled with a declining public/collective sector.
These changes have seen an increase in the volume of private hospitals, which are perceived as offering greater efficiency and superior healthcare services to state hospitals. In fact, Beijing has committed to making private health care a larger part of its overall ecosystem, aiming for 20 per cent of beds and 20 per cent of spending to be conducted through private institutions by 2020, according to a <a style="color: #000080;" href="http://www2.deloitte.com/content/dam/Deloitte/cn/Documents/life-sciences-health-care/deloitte-cn-lshc-chinalshcindustryreportsection5-en-081014.pdf" target="_blank">Deloitte report</a>.
A Deloitte report on <a style="color: #000080;" href="http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx-lshc-2015-health-care-outlook-china.pdf" target="_blank">China&#8217;s 2015 healthcare outlook</a> notes that healthcare spending is increasing rapidly, with China&#8217;s annual expenditure is projected to grow at a mean of 11.8 per cent per annum in the 2014-2018 period, reaching $892 billion by 2018. This expenditures are being driven primarily by consumers’ rapidly increasing incomes and public healthcare reforms initiated by Beijing.
Firms which see the prospects of such a market are cheese manufacturer Bega and Australian vitamin manufacturer Blackmores <a style="color: #000080;" href="http://www.theaustralian.com.au/business/companies/blackmores-bega-target-chinas-ageing-population/news-story/9dcb9788822b16fb7e458a58c8004c27" target="_blank">develop a joint venture (JV) product</a>, as part of an effort to capitalise on the opportunities for medicinal foods targeting elderly people.
With multinational corporations (MNC), state-linked enterprises an private enterprises looking to capitalise on the growth opportunities of the healthcare sector, as well as increasing privatisation, KPMG predicts in a <a style="color: #000080;" href="http://www.kpmg.com/cn/en/issuesandinsights/articlespublications/newsletters/our-view/pages/our-view-1412-05-taking-the-private-route.aspx" target="_blank">2014 report</a> that increasing privatisation will see more buyouts &#8211; like this deal involving Bain Capital -as well as more JV&#8217;s and greenfield investments.
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Bain Capital enters China, acquires Asia Pacific Medical Group in $150m deal

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Bain Capital enters China, acquires Asia Pacific Medical Group in $150m deal

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