Sunway Berhad had a pile of offers to weigh. Domestic and international investment funds, sovereign wealth funds and private equity firms all put proposals on the table for a piece of its healthcare arm. On 23 June 2021, the Malaysian group announced its pick: an affiliate of GIC Pte Ltd, Singapore’s sovereign wealth fund, will pay RM750 million for 16 percent of Sunway Healthcare Holdings Sdn Bhd, counted on a fully converted basis.
The price tag values Sunway Healthcare at close to RM4,688 million. Sunway said buyer and seller agreed terms freely, after the proposals had been evaluated. Maybank Investment Bank Bhd was Sunway’s sole financial advisor.
What the founder and the buyer said
Group founder and chairman Tan Sri Jeffrey Cheah called it “a significant milestone for Sunway”. The pull from so many investors, he said, shows confidence in the Sunway brand and in the track record of the healthcare division. “I am confident that the Sunway-GIC partnership will further enhance the value of Sunway Healthcare,” he added.
GIC has put money into healthcare in the United States, Australia, Brazil, the Philippines, China and Vietnam, across public and private markets. Choo Yong Cheen, its Chief Investment Officer of Private Equity, pointed to Sunway Healthcare’s “award-winning operating track record” and its focus on state-of-the-art medical infrastructure.
Amit Kunal, who heads GIC’s Direct Investments Group (Southeast Asia) in private equity, laid out the bet. Malaysia’s private healthcare should gain from an aging population, a growing and wealthier middle class and strong health insurance penetration, he said. Medical tourism, in his view, should return once COVID-19 travel restrictions ease, helped by the country’s air connections and quality facilities.
Lau Beng Long, Sunway Healthcare’s Managing Director, said the deal supports growth of existing hospitals and new ones around the country, along with the group’s ancillary healthcare businesses. He also expects to learn from GIC’s regional healthcare experience.
Where the money goes
Today the business runs two tertiary hospitals with combined capacity above 800 beds and more than 400 consultant specialists. The expansion is meant to lift capacity to approximately 3,000 beds over the next few years, and to make Sunway Healthcare a leading integrated private group with services in Malaysia and Singapore.
Work is already under way at the flagship Sunway Medical Centre in Sunway City, Selangor, and at Sunway Medical Centre Velocity in Kuala Lumpur. New hospitals are being developed in Seberang Jaya, Penang; Sunway Damansara in Selangor; Sunway City Ipoh in Perak; and Kota Bharu in Kelantan. Two more are in the pipeline, in Sunway City Iskandar Puteri, Johor, and Paya Terubong, Ayer Itam on Penang island.
Sunway Healthcare also runs Sunway Specialist Centre Damansara, Sunway Medical Centre Singapore, a traditional and complementary medicine centre and a home care service. Next year it will launch Sunway Sanctuary, 500 senior-living suites directly above Sunway Medical Centre in Sunway City.
Sources
- GIC invests RM750 million in Sunway Healthcare | GIC Newsroom
- Sunway Group | Press Releases – GIC Invests RM750 Million in Sunway Healthcare
