Ekuinas eyes healthcare, focuses on exits & value-add

Abdul Rahman Ahmad, Chief Executive Officer (CEO) of Ekuinas delivering his presentation on Ekuinas' Performance for FY2014

Ekuiti Nasional Bhd (Ekuinas) has its eyes on the healthcare industry and is already talking  to companies in the sector, said CEO Abdul Rahman Ahmad.

Although he did not reveal who the targeted healthcare businesses were, he said Ekuinas was interested in healthcare services. The target investment is unlikely to be a hospital operator as “most of the hospitals are owned by large companies already, so it’s not likely to be those,” he added.

“We are looking at some targets within healthcare and we are looking at services within the healthcare space,” Ahmad shared.

In his presentation of Ekuinas’ results for the financial year ended December 31, 2014, chairman Raja Arshad Raja Uda said the firm will continue expanding and consolidating its food business and oil and gas companies while expanding into healthcare as a new sector.

Further into the future, the government-linked private equity fund management firm said it will also explore leisure and tourism as well as retail investments.

Ekuinas currently invests in six core sectors, namely retail food and beverages, fast moving consumer goods (FMCG), oil and gas, services, education and manufacturing.

From the Ekuinas Annual Report 2014
From the Ekuinas Annual Report 2014

Rahman said that Ekuinas’ strategy had always been to buy a few private companies and consolidate them to create market leaders, such as with the formation of its food group which comprise Revenue Valley Group, San Francisco Coffee and PrimaBaguz and CoolBlog.

Previously, it also merged Tanjung Offshore Bhd’s (offshore supply vessel) OSV business with Omni Petromaritime Sdn Bhd to form Icon Offshore Bhd in 2012. Ekuinas listed Icon in June 2014.

While it has proved a worthy investment for Ekuinas, having generated a total realised proceeds of MYR954.8 million to-date, Icon’s share price performance has taken a beating.

The counter closed at 57.5 sen yesterday, reflecting a 22.3 per cent decline year-to-date and a 68.9 per cent tumble from its initial public offering price of MYR1.85.

Ekuinas still holds a 42.3 per cent stake in Icon, and Arshad told a media conference yesterday that: “We believe in Icon and we will continue to add value to it.”

Ekuinas has also formed the Ilmu Education Group, which has the APIIT Education Group, APIIT Lanka, Cosmopoint Group, UNITAR International University and Tenby Group of Schools, under its wing.

The firm is pushing Ilmu Education Group for an initial public offering towards the end of this year or early 2016. That said, Rahman noted that Ekuinas was keeping its exit options open for Ilmu, although “an IPO is preferred at this point of time”.

Expediting exits

Aside from adding healthcare and services to its portfolio, one of Ekuinas’ current focus is on exits.

“As we go forward and as our funds mature, it is increasingly important for Ekuinas to expedite its realisation initiatives to maintain fund performance,” Rahman told reporters.

The investment period for Ekuinas is between three to five years, and it is noteworthy that its Ekuinas Direct (Tranche I) Fund (vintage year 2010) has been fully deployed while Tranche II, which was started in 2012, has been fully committed.

Rahman noted that the firm intends to also “crystallise value in its FMCG investments”.

On its FMCG portfolio business, Rahman implied that it was not ready for an exit as there was much expansion to be done.

“We need to scale first, to increase number of outlets. Consumer business is not that simple, we may take longer (before we exit),” he said.

As for its investment in food business Burger King, Rahman said Ekuinas was still looking to exit.

“The strategy is the same, we are still open to talks although the deal did not go through (with the previous interested buyer). Many parties have shown interest,” he told reporters.

On pricing the sale of Burger King, Rahman said it will be the same as what was offered to Brahim’s Holdings Bhd.

In February, Brahim’s shareholders have rejected the company’s plan to buy the loss-making fast-food Burger King franchise from Ekuinas for MYR95mil.

Brahim’s said since the resolution was for purchase was rejected in an EGM, the proposed joint venture was withdrawn with the consensus of the shareholders.

Both Ekuinas and Brahim’s managing director Ahmad Zaki Ahmad were reportedly disappointed with the failed deal.

Brahim’s had told shareholders that it would take about two years to turn around Burger King and it would be beneficial in the long-term.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.