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QIC, Goldman Sachs Private Equity, China's Pagoda to snap up

Private equity-owned cancer care provider Icon Group is poised to be sold for more than $1 billion, as first reported by Street Talk on Sunday.

It is understood a deal has been struck with a consortium comprised of local investment heavyweight QIC Ltd, Goldman Sachs Private Equity and China's Pagoda Investment.

The price is said to be north of $1 billion, representing a multiple of 16 times 2017 financial year earnings before interest, tax, depreciation and amortisation.

Pagoda Investment is a private equity firm specialising in growth capital and buyouts in China's technology, media and telecommunications industry. It is run by former QIC and China Investment Corporation senior executive James Leong.
 


 

It is understood Icon's existing doctor-shareholders and management will roll at least half their equity into the NewCo. The strategy is to continue Icon's roll-out of new cancer centres in Australia and accelerate the push into south-east Asia and China.

The deal is expected to complete by mid-August and is conditional on approval from the Foreign Investment Review Board. However, sources noted the consortium has a strong Australian anchor investor in QIC.

Icon, owned by Quadrant Private Equity, was advised by Credit Suisse, EY and King & Wood Mallesons. 

The acquiring consortium was advised by Corrs Chambers Westgarth.

Icon had been pitched as a $1.5 billion-odd company based on forecast annual earnings of $80 million to $100 million in the 2018 financial year.
 


 

Its foray into Asia has included Singapore Oncology Consultants, one of the largest privately-owned cancer care groups in the region; a partnership with Yibai Healthcare; and the construction of a cancer centre in Guangzhou.

The company has also been on a heavy buying spree locally snapping up health tech group Epic Digital and Slade Health.

Icon is run by Mark Middleton and has Quadrant principal Marcus Darville on the board as chairman and investment director Simon Pither as a non-executive director.

The Carlyle Groupwhich had CITIC CLSA in its corner and is a former owner of private-hospital operator Healthscope, dropped out of the auction before final bids were tabled earlier this month.

It's understood the bidding field also included Chinese conglomerate Fosun, while Australian trade players, including GenesisCare, were largely precluded from the process.

Source:Financial Review  Release date:2017-04-11