Healthscope sells Australian pathology business to Crescent Capital Partners for $105m

Tuesday, June 23, 2015

Healthscope will sell its Australian pathology operations to Crescent Capital Partners for $105 million as it focuses on expanding its hospital business.

The pathology business comprises about 550 collection centres and 31 laboratories in Victoria, South Australia, New South Wales and the Northern Territory. The company will also transfer six skin clinics from its medical centres operations to Crescent.

Net cash proceeds from the sale will be used to fund Healthscope’s brownfield expansion pipeline at major hospital sites, the company said in a statement to the stock exchange.

“Our Australian pathology operations are non-core, have been operating in challenging market conditions for a number of years and their underlying earnings contribution to the group is limited,” Healthscope (HSO) chief executive Robert Cooke said.

In the first half of 2015 the Australian pathology operations and selected skin clinics contributed about 1 per cent of group operating earnings before interest, tax, depreciation and amortisation. But the businesses recorded a loss of $3.5m at the operating EBIT line and were earnings per share dilutive.

“We remain committed to our international pathology operations, which have consistently performed well over time,” Mr Cooke said.

The sale price comprises cash proceeds of $92.5m and a promissory note of $12.5m. The deal is scheduled to be completed by the end of July.

 

theaustralian.com.au