TPG’s The Rise Fund to acquire IHH Healthcare's education arm for $306m

IHH Healthcare, Asia’s largest hospital group by market capitalisation, announced that it has agreed to sell its medical education arm, International Medical University (IMU), to The Rise Fund, TPG’s multi-sector global impact investing platform.

The sale, which values IMU at 1.345 billion ringgit ($306 million), will see IHH Healthcare divesting 100% of its stake to a consortium of investors led by The Rise Fund and the Hong Leong Group.

Founded in 1992, IMU is the largest medical and healthcare-focused higher education institute in Malaysia. The school teaches over 20 programmes and currently enrolls over 3,800 students, according to its website.

It generated earnings before interest, taxes, depreciation, and amortisation (EBITDA) of 75.7 million ringgit in 2020, compared to 87.2 million ringgit in the previous year, according to IHH’s latest annual report.

Its under-construction hospital will be acquired by Columbia Asia as part of the transaction, which is expected to complete by Q1 2023, subject to the fulfilment of certain conditions precedent.

With the divestment, IHH said it will focus on strengthening its healthcare operations in existing markets and extending its footprint into new adjacent markets based on its cluster strategy approach.

“This recalibration of our portfolio is a considered decision as part of our new strategy; we will deploy the proceeds to optimise our operations and clinical services plus invest into new growth peaks for IHH,” said IHH managing director and CEO Dr Kelvin Loh.

IHH, which is listed on both the Kuala Lumpur and Singapore stock exchanges, is Asia’s largest hospital group by market capitalisation, at 56 trillion ringgit ($13.3 billion).

It operates 80 hospitals in 10 countries, including Malaysia, Singapore, Turkey, India, Greater China, as well as other Asian and European markets. The firm holds a controlling interest in brands such as Parkway, Acibadem, Gleneagles and Fortis Healthcare, among others.

Last year, IHH completed the sale of its entire 50% stake in its India-based joint venture, Apollo Gleneagles Hospital Kolkata, to its partner Apollo Hospitals Enterprise Ltd.

“This investment is part of a thematic focus globally on professional education in the medical sector and will be a strong addition to the extensive healthcare and education portfolio that TPG has both globally and in Malaysia,” said TPG senior advisor Tunku Ali Redhauddin Tuanku Muhriz.

TPG’s investments in healthcare and education sectors in Malaysia include Gribbles, Lablink, Clinipath and Quantum – as part of Pathology Asia – Columbia Asia, CVSKL, Beacon and Alty, as well as Sri KDU, Real Schools and GEMS as part of XCL Education.

The investment in IMU is The Rise Fund’s second medical education investment this year. In February, through investments in the Burrell College of Osteopathic Medicine and Idaho College of Osteopathic Medicine, The Rise Fund launched the Center for Health Education and Access, a new, integrated, mission-driven osteopathic education platform in the US.

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