ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

Full Version: Integrated Healthcare Holdings (IHH)
You're currently viewing a stripped down version of our content. View the full version with proper formatting.
Pages: 1 2
The Straits Times
Jun 16, 2012
S'pore retail investors offered 52m IHH shares

IPO to run from July 4-11; Temasek, GIC among 22 cornerstone investors

By JONATHAN KWOK
SINGAPORE retail investors will be able to ballot for 52 million shares in the widely anticipated initial public offering (IPO) of IHH Healthcare.

The company, Asia's biggest hospital operator, lodged the prospectus for its large-scale dual listing in Singapore and Malaysia yesterday.

The 552-page document - excluding appendices - did not reveal the price of the shares but stated that 52 million of the 2.23billion share offering, or about 2.3 per cent, will be for the Singapore public.

About 36 million shares are slated to be placed out to Singapore institutional investors. Including shares for directors, employees and business associates based here, the entire Singapore offering will be 140.6 million shares.

The Malaysia offering will be 208.5 million shares, including 161.1 million shares for the Malaysian public.

Some 498 million shares will be for placement to institutions, such as global investors, and 1.39 billion shares - about 62 per cent of the entire offering - will be for the 22 cornerstone investors which have already signed up for the IPO.

The prospectus also showed that the Government of Singapore Investment Corp is among the cornerstone investors, confirming earlier reports that the sovereign wealth fund had signed up.

Fullerton Fund Management, a wholly owned subsidiary of Temasek Holdings, has also signed up. Global investment manager BlackRock and subsidiaries of the AIA Group will be investing, as will Como Holdings, which is owned by hotelier Ong Beng Seng, and Malaysia's Employees Provident Fund.

Another one of the high-powered investors is Kencana Capital, an investment holding company controlled by Datuk Mokhzani Mahathir, who is the son of former Malaysian prime minister Mahathir Mohamad.

About 90 per cent of the public issue will be used to repay debt with the rest for working capital and listing expenses.

The IPO will 'enhance the stature of our company to market our services and expand our market position' and allow 'access (to) the equity capital market' for growth opportunities, said IHH in the prospectus.

Risk factors cited included the group's 'substantial leverage'.

The units making up the group earned combined profits of RM379.9 million (S$153million) last year, down from RM554.4million in 2010, but up from 2009's RM83.2million.

For the first quarter of this year, profits were RM123.8million, from RM101.9million in the same period last year.

The document said that the public offering will run from July4 to 11, with the price of shares set to be determined on July 12 after a placement exercise.

Trading is slated to start on July 25.

Among its operations, IHH Healthcare runs Singapore's Mount Elizabeth, Gleneagles and Parkway East hospitals.

These assets, among others, had been operated by the previously listed Parkway Holdings, which was taken private for $3.5 billion by Malaysian state investor Khazanah Nasional in 2010.

Parkway was restructured and packaged with many other operations - such as medical facilities and a health-care university in Malaysia and health-care operations in Turkey for this listing.

Some reports have suggested that IHH's shares will be sold at RM2.85 each to raise more than RM6.36 billion, though some earlier reports have estimated a more conservative figure of about RM4.7 billion.

While experts have been scrambling to estimate the windfall for Khazanah, the listing will boost Singapore's stock market too.

IHH will be the largest listing so far this year in Singapore, with the biggest so far being the $221.7 million April offering by Bumitama Agri.

jonkwok@sph.com.sg
Here come the salespeople, touting the merits of IHH trading at 93x historical earnings and about 16x EV/EBITDA. I won't bet my life on this one, though. As they say, IPOs are almost always over-priced!

The Straits Times
Jun 27, 2012
Keen interest in IHH Healthcare IPO even at RM2.85


By Anita Gabriel

THE region's second-largest share offering this year, IHH Healthcare, a joint listing on the Singapore Exchange and Bursa Malaysia, is creating plenty of buzz in the investing fraternity.

But IHH's key promoter and controlling shareholder, Malaysia's sovereign wealth fund Khazanah Nasional, may appear to some to be a tad ambitious in pricing its health-care jewel.

The final pricing has not been set yet but IHH's speculated offer price of RM2.85 - which translates to an earnings multiple of a whopping 93 times, based on financial year 2011 earnings - appears to be a very aggressive valuation. Its global health-care peers are trading at an average of 28 times price earnings.

The expectations appear even more inflated against a backdrop of bruised investor sentiment, volatile markets and a fragile global economy.

If the pricing succeeds, it will be a shrewd move by Khazanah, which two years ago privatised Singapore-listed Parkway Holdings at some 30 times earnings.

Still, the allure of what will soon become the world's largest listed health-care firm is probably best reflected by the beeline made by highly disciplined and savvy investors to become cornerstone investors in IHH.

In Singapore, they include tycoon Ong Beng Seng, Government of Singapore Investment Corp and Fullerton Fund Management.

'We're a 'corner-pebble' in the IPO. IHH is the best thing in town today,' Mr Mokhzani Mahathir, owner of Kencana Capital, one of IHH's cornerstone investors, told The Straits Times.

IHH is offering 2.23 billion shares - 80 per cent of them new shares - for the listing, set to raise US$2 billion (S$2.5 billion) next month.

OSK-DMG Research said the suggested valuation is justified as none of IHH's regional peers has significant operations overseas. IHH operates more than 4,900 beds in 30 hospitals, mostly in Singapore, Malaysia and Turkey, with more than 3,300 new beds in the pipeline.

A better valuation benchmark for the health-care firm, say analysts, is the Ev/Ebitda ratio (enterprise value divided by earnings before interest, tax, depreciation and amortisation).

Analysts' estimates, based on the offer price, show IHH is priced at 16.5 times to 17.6 times Ev/Ebitda - a relatively fair valuation against its regional peers' trading average of 15 times based on Bloomberg data.

It also compares favourably with Khazanah's takeover of Parkway, pegged at 26 times Ev/Ebitda, which implies IHH investors can look forward to more upside.

'There is really no company like this in Asia with the market position and geographic spread of IHH. So some premium is justified,' private equity firm Symphony International Holdings director Anil Thadani, formerly a Parkway director, told The Straits Times. Symphony will swop its shares in IHH-controlled Acibadem of Turkey for shares in IHH post-listing.

Whichever way you slice the valuation, IHH's extensive cast of cornerstone investors and the relatively small retail offering mean it is unlikely to flop the way Facebook's IPO did a month ago.

'My gut feel is that it's going to be a success,' said Mr Christopher Wong, senior investment manager at Aberdeen Asset Management in Singapore.

anitag@sph.com.sg
I thought healthcare companies should have a high profit margin? How come is it possible for PER of 93 to be converted to 16 X EV/EBITDA?

Unless the company has a lot of cash in their balance sheet, or high interest rate/ depreciation/amortization/ taxation. Malaysia's corporate tax rate is 25%. Let's wait for the prospectus Smile
(27-06-2012, 07:36 AM)Musicwhiz Wrote: [ -> ]'My gut feel is that it's going to be a success,' said Mr Christopher Wong, senior investment manager at Aberdeen Asset Management in Singapore.

My 'gut feel' is they're either a cornerstone investor or a placee. Big Grin
The other 'gut feel' is to avoid funds that MAY (real or perceived) invest your hard-earned $$ using 'gut feel' techniques... Big Grin
Quote:A better valuation benchmark for the health-care firm, say analysts, is the Ev/Ebitda ratio (enterprise value divided by earnings before interest, tax, depreciation and amortisation).

Medical equipment are expensive and will have to be replaced one day. It does not seem to make sense that this item is taken out.

Quote:It also compares favourably with Khazanah's takeover of Parkway, pegged at 26 times Ev/Ebitda, which implies IHH investors can look forward to more upside.

This sentence is the best. Buy expensive and expect people to take over.
The Straits Times
Jul 5, 2012
IHH Healthcare listing heavily subscribed


By Anita Gabriel

GLOBAL investors are flocking to get a slice of the $2.6 billion listing of Malaysian-controlled IHH Healthcare.

The firm began marketing about 138 million shares to institutional investors on Tuesday, and met with such an overwhelming response that the issue was over-subscribed by more than 30 times by yesterday, The Straits Times understands.

IHH, which hopes to raise about $2.6 billion from its dual listing on Singapore Exchange and Bursa Malaysia, priced its shares at an indicative range of RM2.67 to RM2.85 (S$1.07 to S$1.14).

'IHH's offering to cornerstone or strategic investors was oversubscribed by two times. So it's not surprising that the institutional portion of the offering will draw in the crowds as well. The challenge is allocating the shares once the books close,' said a source close to the deal. An additional 169 million shares may be offered if demand is strong.

Retail investors in Singapore and Malaysia have until July 11 to apply for shares in IHH, which is controlled by Malaysian sovereign wealth fund Khazanah Nasional.

The prospectus for the 2.23 billion share offering - of which 52 million shares are being offered to the Singapore public - was launched on Tuesday.

'It is a good company in the right sector. It all boils down to valuation. Some may think it has priced in all the growth with a rich valuation. Others may think there's still great upside,' said an analyst.

When trading starts on July 25, IHH will have a market value of about $9.5 billion.

Khazanah, which fended off India's Fortis Group two years ago to win control of Singapore-listed Parkway Holdings, stands to pocket a gain of RM5 billion from its initial investment of RM6 billion from IHH's listing.

IHH now wholly owns Parkway and its Mount Elizabeth Orchard, Mount Elizabeth Novena, Gleneagles and Parkway hospitals, giving it a 43.9 per cent share of the private health-care market.

'About 90 per cent of the IPO (initial public offering) proceeds, or RM4.7 billion, will be used to pare down debts related to the acquisition of Turkey's Acibadem and the privatisation of Parkway.

'This capital structure allows us significant headroom to leverage up should we decide to look for other opportunities for expansion,' said IHH executive director Tan See Leng.

While IHH has not stopped looking for opportunities abroad, Dr Tan said the group is focusing on the 'sizeable chunk on its plate', including the 3,300 new beds in the pipeline.

anitag@sph.com.sg
The Straits Times
Jul 11, 2012
IHH listing set to be roaring success

Shares for Asia's largest health-care operator over-subscribed by 100 times

By Anita Gabriel

THE mega dual listing of IHH Healthcare, Asia's largest health- care operator, in Singapore and Malaysia looks set to be a runaway success.

The shares on offer have been over-subscribed by a whopping 100 times by global institutional investors scrambling for exposure in Asia's booming health sector.

Given the healthy demand from 'a roster of blue chip institutional investors', it is 'fairly likely' the shares will be fixed at the top end at RM2.85 (S$1.14) a piece, said a source close to the listing.

However, The Straits Times understands that the firm's promoters - Malaysia's sovereign wealth fund Khazanah Nasional - may be keen to price it just a nudge lower than the top price to provide some upside to potential investors as 'goodwill'.

'The key promoters may want to leave something on the table for institutional investors. It's the Malaysian way. This was done for Felda and Bumi Armada's IPOs, so it may be done for this one too,' said an observer.

Although Felda, which made its Kuala Lumpur debut on June28, had earlier attracted more than 30 times the shares available for institutional investors, the stock was priced below the top of its indicative range.

Similarly, offshore oil and gas vessel operator Bumi Armada, controlled by Malaysian tycoon Ananda Krishnan, fixed its IPO price at close to 4 per cent below its top indicative price although its offer was 25 times over-subscribed by institutional investors.

The firm was listed in July last year in an exercise that raised RM2.7 billion, the country's largest new listing last year.

But this may not be as easy to pull off with IHH, which is 62 per cent controlled by Malaysia's sovereign wealth fund Khazanah.

'Unlike Felda or Bumi Armada which are Malaysian-owned entities, there are different shareholders involved in IHH who may opt for the conventional way, which is to price it at the top end, given the overwhelming response,' said a source.

IHH's substantial shareholder Abraaj Capital, a private equity fund which is selling 434.7 million shares of the 2.23 billion shares offered, would naturally want to exit at the highest price. IHH's other shareholder Japan's Mitsui & Co, whose stake will be diluted from 27 per cent to 20 per cent post-IPO, is expected to remain a long-term shareholder.

The nine-day book building exercise for global institutional investors involving 138 million shares will end today with the final price for the first Malaysian-Singapore dual listing to be determined tomorrow.

'The biggest question currently from investors is why aren't there enough shares?' said the source.

IHH expects to raise some RM6.4 billion from its IPO, most of which will be used to repay debt of some RM4.6 billion.

It will be Singapore's largest stock offering this year and the world's third largest, after the United States' Facebook and Malaysia's Felda Global Ventures.

The IPO pipeline in Singapore, which was looking uninspiring this year, with firms postponing or shelving their stock offerings on the back of market turmoil, appears to have suddenly burst back to life.

Some sizeable IPOs have been announced, largely in the realm of business trusts. India's telecommunications giant Reliance Communications plans to spin off GTI, its undersea cable unit, and list it as a business trust on the Singapore Exchange, in an exercise that is expected to raise as much as US$1 billion (S$1.27 billion).

Property manager Ascendas is spinning off its hospitality arm in an IPO that is expected to raise up to $800 million.

In May, Fortis, controlled by India's billionaire Singh brothers, revealed plans to list Religare Health Trust to raise $500 million. However, there appears to be no new developments on that front although it was reported earlier that it has received the SGX nod for the offering.

Then of course, there's the much-anticipated motorsport racing firm Formula One which had delayed its IPO till later this year due to market turbulence. While it had earlier picked SGX as a listing venue, sources close to the deal said the firm is assessing other options.

If F1 goes ahead with its listing plans on SGX which is estimated to raise some US$450 million, the high-profile listing would do much to further reinvigorate the IPO scene here.

anitag@sph.com.sg
The Straits Times
www.straitstimes.com
Published on Jul 12, 2012
Malaysia's IHH raises about $2.5 billion in stock IPO


KUALA LUMPUR (AFP) - Malaysia's IHH, Asia's biggest hospital operator has raised almost $2.0 billion (S$2.5 billion) in the world's third-largest initial public offering (IPO) this year, Dow Jones Newswires reported on Thursday.

IHH priced its shares at 2.80 ringgit (S$1.11) a share, near the indicative price of 2.85 ringgit a share, according two people familiar with the matter.

It said IHH attracted strong investor interest with its institutional portion over-subscribed by more than 60 times.

The IPO both in Kuala Lumpur and neighbouring Singapore means Malaysian companies will have had two of the biggest public offerings this year amid weak global markets.

The shares will begin trading on both Malaysia's and Singapore's stock exchanges on July 25.

For the rest of the article, please go to straitstimes.com
Malaysia’s IHH mulls $5bn bid for Healthscope
CYNTHIA KOONS AND GILLIAN TAN THE WALL STREET JOURNAL MARCH 11, 2014 1:16PM

MALAYSIA’S IHH Healthcare is considering a bid for Australia’s Healthscope, a hospital and pathology company put on the block by private-equity owners TPG Capital and Carlyle Group in a deal that could be worth $5 billion, people familiar with the matter said.

A sale to a strategic buyer is just one possibility, people familiar with the sale process said.

TPG and Carlyle are also considering an initial public offering of the hospital operator, or they could sell Healthscope’s property and hospital divisions separately. Bids are due in April, one of the people said.

IHH Healthcare hasn’t decided whether it will bid for the assets, one of the people said.

IHH, which is majority-owned by Malaysia’s sovereign-wealth fund Khazanah Nasional, has been bulking up in the healthcare sector in recent years, hoping to capitalise on growing demand for such services both in Southeast Asia and outside the region.

In 2010, it acquired Parkway Holdings., in a deal that valued the Singaporean healthcare company at $3.5 billion. A year later, IHH spent close to US$1.7 billion amassing a stake in Turkish hospital group Acibadem.

IHH has also been building up its war chest to fund additional acquisitions.

In 2012, the company raised more than $2 billion from an initial public offering of its hospital assets, including its Singapore and Turkey hospitals, through a dual-listing in Malaysia and Singapore. It was one of the biggest listings in Malaysia in recent history.

IHH said it was still looking for new investments, though it wouldn’t comment on Healthscope.

“IHH is always looking at various value-accretive opportunities to add to its portfolio,” a spokeswoman said.

“However, it is not appropriate for us to comment on specific transactions, and we will update the market if there are any material developments.”

Healthscope is one of the largest hospital and pathology companies in Australia. It has 33 hospitals, four mental-health hospitals and four rehabilitation facilities. Healthscope also operates pathology businesses in New Zealand, Malaysia, Singapore and Vietnam.

TPG and Carlyle are also actively exploring an initial public offering of Healthscope. The firms have appointed Macquarie and UBS to run a potential listing while Bank of America, Credit Suisse and Goldman Sachs are also working on a deal, a person familiar with the matter said. The hospital company’s management is talking to potential cornerstone investors in Asia, the Middle East and the US for a listing that would value the company at $5 billion, including $1 billion in debt, a person familiar with the situation said.

The private-equity firms would likely hold on to at least 25 per cent of the company if they pursue a listing, one person said. TPG and Carlyle are also considering selling just a portion of their stakes in Healthscope to sovereign-wealth funds, one person familiar with the situation said.

TPG and Carlyle bought Healthscope for about $1.7 billion in 2010, beating out a rival offer from Kohlberg Kravis Roberts.

Strategic buyers such as Dallas, Texas-based Tenet Healthcare also considered bids at the time, but backed out due to volatility in the company’s stock after their interest in Healthscope was widely reported.
Pages: 1 2