A subsidiary of Temasek Holdings is among potential suitors for Singapore’s Fullerton Healthcare Corporation that submitted their first-round bids this month, DealStreetAsia has learnt.
Sheares Healthcare, a wholly-owned subsidiary of Singapore’s state investment firm Temasek, submitted its bid in the second week of this month, multiple people aware of the development told DealStreetAsia.
We had earlier reported that SIN Capital, the majority shareholder of Fullerton Healthcare, is considering a sale of its stake in the company. SIN Capital is owned by its group president and co-founder David Sin.
China’s Ping An Insurance Group is understood to be the second-largest shareholder in the company. Both SIN Capital and Ping An are expected to sell their entire stake in the current process.
SIN Capital Group may not hire an official sell-side advisor for the deal given its own experience in the investment industry, said one of the people above.
Other PE players that were approached by SIN Capital as part of the stake sale process include PE giants TPG and KKR. However, it is unclear if the two private equity majors have officially joined the bidding process.
Temasek Holdings and TPG spokespersons declined to comment for this story. Meanwhile, SIN Capital, Sheares Healthcare and KKR did not respond to an e-mail.
One of the people aware of the matter said a potential deal could peg Fullerton Healthcare’s enterprise value at $1.3-1.6 billion. The consideration includes the total debt of the company estimated at around $700 million.
In February, the company had announced its intention to fully redeem its senior perpetual capital securities worth $175 million on the first call date of April 6, 2020. The securities were issued in March 2017 with a distribution rate of 7 per cent per year in the first three years before the first call date.
The current stake sale is said to be linked to the firm’s securities redemption plan. However, Fullerton Healthcare may seek another option because of the brief time period, said one of the people mentioned above.
Aside from the senior perpetual capital securities, Fullerton Healthcare also has two senior unsecured guaranteed bonds valued at S$100 million ($69 million). The first bond, valued at S$50 million, will be due in July 2021 with 2.45 per cent interest rate while the second bond will be due in July 2023 with a 2.75 per cent interest rate.
According to its 2018 financial report, the company’s total liabilities stood at S$473.78 million ($326.7 million). The firm also noted S$151.7 million in revenue and S$15.1 million loss for the year.
In late 2016, the company was valued at S$1.13 billion ($779.1 million) as it sought to conduct an IPO on the Singapore exchange to raise around S$213 million ($149 million).
But a raft of anonymous letters, purportedly written by doctors, was sent to regulators expressing concerns about the way the company charged its fee. Fullerton Health subsequently called off the planned listing, attributing the move to poor market conditions.
In mid-2018, the company was said to be preparing for an IPO in the US but the plan did not materialise.
Fullerton Healthcare was founded in 2010 and operates a network of healthcare facilities across Singapore, Malaysia, Indonesia, Philippines, Hong Kong, China, Australia and New Zealand, according to its website.