KUALA LUMPUR: IHH Healthcare Bhd expects the acquisition of Island Hospital Sdn Bhd (IHSB) to contribute 15 per cent to its revenue.
This is along with more than RM200 million in synergies over the next five years through alignment of commercial practices and operations.
Group chief financial officer Dilip Kadambi said the revenue contribution from IHSB would not be skewed as the group has a large number of hospitals in its network.
"If you look at the overall group, we do have other big hospitals as well. Given that we have a lot of hospitals in our network, the revenue contribution from Island Hospital would not be so skewed that it'll be a big chunk. It will still be upwards of 15 per cent," he told reporters in a virtual media briefing today.
IHH's indirect unit, Pantai Holdings Sdn Bhd entered into a sale and purchase agreement (SPA) with Comprehensive Care Sdn Bhd to acquire 100 per cent stake in 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 with Bursa Malaysia Securities, IHH said 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."
Penang is IHH's second largest cluster in Malaysia. Adding Island Hospital – the largest private hospital in the state – will allow IHH to build on its leadership position in Penang and provide a platform for further growth.
Post acquisition, IHH will have more than 1,000 operational beds in Penang.
Island Hospital holds landbank valued at RM223.4 million, with approvals secured for future development.
The group will also gain a larger share of medical travel into Malaysia, elevating its support for the country's medical tourism aspirations. Island Hospital is the leading hospital for medical tourism, attracting approximately one in three inbound foreign patients to Malaysia.
IHH is one of the largest private healthcare providers in Malaysia, with a network of 11 Pantai Hospitals, four Gleneagles Hospitals, as well as Prince Court Medical Centre and Timberland Medical Centre.
IHSB will become the 18th hospital in the IHH Malaysia network pending the completion of the acquisition, which is expected by end-2024.
With the acquisition, group chief executive officer Dr Prem Kumar Nair said they will likely rebrand the hospital but the change will not be immediate.
"We will take time and there will be some integration areas we will look at. Changing the brand is not something we will take lightly," he said.