KUALA LUMPUR: IHH Healthcare Bhd's indirect unit, Pantai Holdings Sdn Bhd has entered into a sale and purchase agreement (SPA) with Comprehensive Care Sdn Bhd to acquire 100 per cent stake in Island Hospital Sdn Bhd (IHSB) for RM3.92 billion.
The net debt of Island Hospital and its subsidiaries as of June 30, 2024 is estimated to be RM276.3 million.
In a filing to Bursa Malaysia Securities, IHH said that the acquisition offers the company a strategic opportunity to acquire a leading 600-bed capacity private hospital in Penang.
"IHSB Group brings with it strong operations accredited by the Australian Council on Healthcare Standards, with multiple Centre of Excellence, coupled with a large qualified and experienced medical professional team of 119 resident and visiting specialists, offering a wide array of clinical services to serve local and international patients."
"The proposed acquisition will enable IHH to consolidate and solidify its presence in Penang and strengthen its competitive position across Malaysia," it said. IHH said it will realise potential synergies from the acquisition given that IHH Group will now operate three hospitals in Penang with a total of over 1,000 operational beds enabling better coordinated patient care, optimise resource utilisation, and streamline services, resulting in overall improved performance and services.
The acquisition will not have any material effects on the earnings of the IHH Group for the financial year ended Dec 31, 2024 as it is expected to be completed by the end of 2024.
IHSB Group is in the phase of scaling up its operations and has doubled its built bed capacity from 296 beds in the third quarter of 2022 to a total of approximately 500 beds in the third quarter of 2024 with an ability to expand to 600 beds with minimum capital expenditure. "The completion of the proposed acquisition is expected to improve the future consolidated earnings and earnings per share of IHH Group," it said.
IHH Healthcare's share price closed 0.16 per cent or one sen higher at RM6.39, bringing its market capitalisation to RM56.28 billion.