CPE Media News (1/31/2019) – Brookfield Business Partners L.P. (NYSE: BBU, TSX: BBU.UN), along with institutional partners, has reached an agreement to acquire up to 100% of Healthscope Limited (ASX: HSO) for approximately US $4.1 billion or AUS $5.7 billion.
The transaction will be funded with up to US $1.0 billion of equity, US $1.4 billion of long-term financing and US $1.7 billion from the sale and long-term leaseback of 22 wholly-owned freehold hospital properties.
Brookfield Business Partners expects to fund approximately one third of the equity, with the balance being funded by institutional partners. Prior to or following closing, a portion of Brookfield Business Partners’ commitment may be syndicated to other institutional investors.
NWH Australia AssetCo Pty Ltd as trustee for NWH Australia Asset Trust, a controlled entity of NorthWest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) will acquire 11 freehold hospital property assets for approximately CDN $1.2 billion.
Healthscope is the second largest private hospital operator in Australia and the largest pathology services provider in New Zealand, operating 43 private hospitals across every state in Australia and owns 24 pathology laboratories across New Zealand.
Formed in 1985 and initially listed on the Australian Securities Exchange (ASX) in 1994, Healthscope was taken private by TPG and The Carlyle Group in 2010. Healthscope was re-listed on the ASX in July 2014.
photo credit: Healthscope
News Release
BROOKFIELD BUSINESS PARTNERS TO ACQUIRE HEALTHSCOPE
BROOKFIELD NEWS, Jan. 31, 2019 – Brookfield Business Partners L.P. (NYSE:BBU) (TSX:BBU.UN) (“Brookfield Business Partners”) together with institutional partners (collectively “Brookfield”), is pleased to announce that it has reached an agreement to acquire up to 100% of Healthscope Limited (ASX: HSO) (“Healthscope” or the “Company”) for approximately $4.1 billion (AUD$5.7 billion). Healthscope is the second largest private hospital operator in Australia and the largest pathology services provider in New Zealand.
“Healthscope is a leading business offering best-in-class, essential services to the well-established and growing private healthcare sector in Australia and pathology services sector in New Zealand,” said Len Chersky, Managing Partner, Brookfield Business Partners. “As a long-term operator of and investor in service businesses globally, and one of the largest builders of hospitals in Australia, we are confident in the prospects for Healthscope to strengthen, grow, and continue to provide quality healthcare services to the community under our ownership.”
Business Overview
Healthscope operates 43 private hospitals across every state in Australia and owns 24 pathology laboratories across New Zealand. The Company provides doctors and patients with access to operating theaters, nursing staff, accommodations, and other clinical care and consumables.
Business highlights:
• Market leader in critical service sector. Healthscope is a leader in private healthcare services, as the second largest private hospital operator in Australia.
• Essential social infrastructure. Private hospitals are essential assets that work in parallel with the public healthcare system to provide patients access to quality care.
• Favorable industry dynamics. Healthscope is well-positioned to benefit from favorable demographic trends and a growing population driving demand for hospital services.
• Track record of long-term stable growth. Healthscope has delivered continued growth in revenue and EBITDA for many years.
• Substantial embedded growth. The business has several recently completed and ongoing developments, redevelopments and expansions which will support near and longer-term cash flow growth.
Funding
The transaction will be funded with up to $1.0 billion of equity, $1.4 billion of long-term financing and $1.7 billion from the sale and long-term leaseback of 22 wholly-owned freehold hospital properties.
Brookfield Business Partners expects to fund approximately one third of the equity, with the balance being funded by institutional partners. Prior to or following closing, a portion of Brookfield Business Partners’ commitment may be syndicated to other institutional investors.
Advisors
Bank of America Merrill Lynch is acting as sole financial advisor to Brookfield. King & Wood Mallesons is acting as lead legal counsel to Brookfield. In addition, MinterEllisonRuddWatts is providing New Zealand legal advice.
Transaction Process
Closing of the transaction remains subject to necessary shareholder and court approvals, as well as customary closing conditions including, among others, regulatory approvals. Closing is expected to occur in the second quarter of 2019.
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Brookfield Business Partners is a business services and industrials company focused on owning and operating high-quality businesses that benefit from barriers to entry and/or low production costs. Brookfield Business Partners is listed on the New York and Toronto stock exchanges. Important information may be disseminated exclusively via the website; investors should consult the site to access this information.
Brookfield Business Partners is the flagship listed business services and industrials company of Brookfield Asset Management Inc. (NYSE: BAM)(TSX: BAM.A)(EURONEXT: BAMA), a leading global alternative asset manager with more than $330 billion of assets under management For more information, please visit our website at https://bbu.brookfield.com/.
Media:
Kerrie Muskens
Tel: +61 2 9158 5216
Email: kerrie.muskens@brookfield.com
Investors:
Gwyn Hemme
Tel: (416) 359-8632
Email: gwyn.hemme@brookfield.com