Philippines' Ayala explores minority stake sale in AC Health, sources say

Ramsay Health Care

01/08/2024 07:52

By Yantoultra Ngui
       SINGAPORE, Aug 1 (Reuters) - Ayala Corp  AC.PS , the
Philippines' oldest conglomerate, is exploring selling a
minority stake in Ayala Healthcare Holdings (AC Health) in a
potential deal that could value its healthcare arm at up to $500
million, two people said. 
    Ayala has hired Bank of America to explore the sale of the
minority stake AC Health to strategic investors or partners that
will help further expand the business of the healthcare arm, the
people added.
    The people, who have knowledge of the matter, declined to be
named as the deliberations were private.
    The exact minority stake size to be potentially put on sale
was not immediately certain. No final decision has been made on
the sale, the people said.
    In a response to Reuters on Thursday, Ayala said in a
statement AC Health is looking to continue to build its
portfolio and has a healthy pipeline of potential targets. 
    "With this, AC Health continues to explore all options,
including engaging with a partner at different organizational
levels, for its next stage of growth," it added.
    Bank of America did not immediately respond to request
seeking comment.
    Southeast Asian healthcare assets are gaining favour as
global investors bet on the region's growing affluence and aging
population and the sector's ability to weather the current
challenging economic environment.
    In November, Australia's Ramsay Health Care  RHC.AX  and
Malaysian conglomerate Sime Darby  SIME.KL  agreed to sell their
stakes in their hospital joint venture, Ramsay Sime Darby Health
Care, to Columbia Asia Healthcare for 5.7 billion ringgit 
($1.25 billion).
    Established in 2015, AC Health has grown steadily and has a
portfolio that includes drugstore chains Generika and St. Joseph
Drug, and pharmaceutical importer and distributor IE Medica and
MedEthix, according to its websites.
    It also counts Healthway and QualiMed, a network of multi
specialty clinics, ambulatory centers and full-service
hospitals, and KonsultaMD, a healthcare aggregator app, under
its portfolio, its websites showed.
    For 2023, AC Health posted a 19% jump in revenue to 8.6
billion Philippine peso ($147.51 million), driven by higher
contributions from pharma, clinics, and hospitals businesses,
according to the company's presentation posted on its website. 
    AC Health's core earnings before interest, taxes,
depreciation, and amortization, or EBITDA, jumped 23% to 722
million peso, the presentation showed.
    Besides healthcare business, Makati City-headquartered Ayala
has interests including in property, banking, telecommunications
and power and is one of the largest conglomerates in the
Philippines, its website showed.  

($1 = 4.5530 ringgit)
($1 = 58.3000 Philippine pesos)

 (Reporting by Yantoultra Ngui
Editing by Shri Navaratnam)
 ((Yantoultra.Ngui@thomsonreuters.com;))