Asian health care private equity buyouts boosted to new highs by Chinese investors in 2017
Companies increasingly partnered with foreign players for bigger deals
Health care buyouts in Asia hit a new high in 2017, with deal values from 61 transactions reaching US$7.2 billion, a record since at least 2001, according to consulting company Bain and Co.
Chinese private equity funds have in recent years become active in large, outbound merger and acquisition deals spanning Australia, the United States and Europe. And according to the Global Healthcare Private Equity and Corporate M&A Report 2017, released by Bain recently, the buyout value of China-domiciled private equity investors in 2017 reached US$4.8 billion, of which about half went into financing four cross-border deals last year. But the bulk of the 30 deals carried out by Chinese private equity funds last year were domestic deals.
Excluding the portion of the US$4.8 billion investment funded by foreign partners, Chinese private equity investors provided US$2.5 billion, or about 35 per cent, of disclosed deal values in Asia-Pacific last year.
Vikram Kapur, a Bain partner based in Hong Kong, said a key theme that stood out from these cross-border buyout deals was the rising trend among Chinese investors to team up with foreign private equity or corporate players to fund these transactions.
One such example is Hillhouse Capital’s investment in US-based Carestream Health’s digital dental business, a US$800 million buyout that was carried out in partnership with American fund Clayton, Dubilier and Rice in April 2017. Hillhouse invested 25 per cent of the deal, while its US partner invested the remaining 75 per cent.