Malaysia’s state-linked private equity firm Ekuiti Nasional Bhd (Ekuinas) has divested its entire 60 per cent stake in third-party administrators MediExpress Group and PMCare Sdn Bhd to Sumitomo Corporation, it said in a statement on Wednesday.
No financial details of the transaction were disclosed.
Following the deal, both companies’ minority shareholders have partially exited but will continue to hold a meaningful stake and remain part of the management of the respective entities while Sumitomo will emerge as a majority shareholder in both.
“Over the investment period, Ekuinas has successfully delivered on its value creation plans for both MediExpress and PMCare. These efforts comprise operational enhancements of processes and systems, strengthening management and operation teams as well as increasing their market share. Through this divestment, Ekuinas will generate a minimum internal rate of return of 38.8 per cent,” said Ekuinas CEO Syed Yasir Arafat Syed Abd Kadir.
MediExpress, which comprises MediExpress (Malaysia) Sdn Bhd and Health Connect Sdn Bhd, and PMCare are primarily focused on managing both inpatient and outpatient benefits for their clients. While MediExpress focuses on insurance companies, PMCare services corporate clients. Together, both cater to over two million members across more than 3,000 medical providers in Malaysia.
The divestment brings Ekuinas’ total realisation proceeds to more than 2 billion ringgit ($490 million). The PE firm invested $18 million in MediExpress and PMCare in 2015 in its first investments in the healthcare sector.
Last month, Ekuinas picked up a 40 per cent stake in local web hosting and cloud service provider Exabytes Capital Group for 44 million ringgit ($10.7 million), with the option to increase its stake to up to 54 per cent.
This January, Ekuinas launched its fourth fund, Ekuinas Direct (Tranche IV) Fund, at 1 billion ringgit ($240 million) with an option to increase the corpus to 1.5 billion ringgit ($360 million). The fund will invest in Malaysia-based businesses, with an emphasis on core sectors such as education, oil and gas, fast-moving consumer goods (FMCG), retail and leisure, healthcare and services.
Ekuinas’ funds under management stand at about $990 million.