GIC in talks to buy stake in Brazil’s Rede D’Or for $980 million

Singapore’s sovereign wealth fund, GIC Pte, is in talks to buy a 14 per cent stake, worth up to $980 million, in Brazil’s largest hospital chain, Rede D’Or Sao Luiz, a report said.

Citing people familiar with the matter, Bloomberg said that GIC plans to pick up this stake from the hospital chain’s founding Moll family and Grupo BTG Pactual, while adding that the deal could be announced within a month.

Last week, private equity firm Carlyle Group LP had shelled out $600 million to pick up an 8.3 per cent stake in Rede D’Or, that has over 4,500 beds in 29 hospitals and 30 oncology clinics.

In January this year, Brazil allowed foreign investors to buy local hospitals and health clinics in the country.

The Carlyle deal had seen the private equity firm acquiring a stake through capital increase, that led to the dilution of stakes for existing investor Grupo BTG Pactual SA,and also its promoter and controlling shareholder who is also its chairman – Jorge Moll.

“Proceeds from the transaction will support Rede D’Or’s growth plans, including the construction of new hospitals, expansion of existing facilities, and the financing of new acquisitions. Rede d’Or will remain majority-owned by the founding Moll family, and BTG Pactual will continue to own a minority stake,” Carlyle had said in a statement last week.

Post the Carlyle deal, it is estimated that the Moll’s family has a 68 per cent stake in Rede d’Or, while BTG holds. 23.6 per cent.

Rede D’Or, which has 27 hospitals in four Brazilian states, had revenues to the tune of of 5.5 billion reais last year, and earnings before interest, tax, depreciation and amortization of about 930 million reais, during the same period.

“BTG acquired 25.6 per cent of the company in 2010 for 600 million reais, through convertible bonds,” the Bloomberg report said quoting a person with knowledge of the matter, while adding that “Rede D’or’s value had surged in the past five years, making Moll a billionaire with an estimated net worth of $4.5 billion”.

After Carlyle’s purchase, BTG’s stake stands at almost 24 per cent, while the Moll family maintains control of the company.

In December 2015, an affiliate of GIC had reached a deal to acquire Eco Sapucai, an office building in Downtown Rio de Janeiro, marking the sovereign wealth fund’s first wholly-owned investment in Latin America.

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Image: Freedigitalphotos.net

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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.