Ramsay Health Care chief executive Chris Rex. Photo: Jim Rice
Ramsay Health Care chief executive Chris Rex on Wednesday said the company was assessing several acquisition opportunities across global markets, and that Ramsay had the financial capacity to pursue a transformative deal.
Speaking on the sidelines of the Macquarie Australia Conference, Mr Rex would not comment on specific deals, but noted the private hospital operator remained firmly in acquisition mode.
“There will be acquisition opportunities in a number of markets and we’ll have a look at everything that comes along, and if it makes sense we’ll have a go,” he said.
“Because of the un-consolidated nature of ownership of private hospitals in France it is far more likely that there will be acquisition opportunities coming on a regular basis. Clearly in Australia and the UK where the market is much more consolidated acquisition opportunities are rarer.”
After a May 2014 deal to buy Generale de Sante, Ramsay became France’s market-leading private hospital provider through its joint venture Ramsay Sante, with 115 facilities or 16 per cent of the market. Ramsay also has operations in the United Kingdom and two years ago established a 50-50 joint venture in Asia with Malaysian conglomerate Sime Darby. The group combined Sime Darby’s three hospitals in Malaysia with Ramsay’s three hospitals in Indonesia.
Mr Rex would not comment on whether Ramsay had any interest in smaller local rival Healthe Care, owned by private equity firm Archer Capital, and is thought to be assessing a float or other exit options.
Mr Rex told journalists Ramsay had the firepower to pull off a transformative acquisition in the future, although he would be mindful of financing any transaction.
“We do have a significant amount of headroom and obviously against the EBITDA (earnings before interest, tax, depreciation and amortisation) of any company we might acquire we can borrow further. So I think, yes, but we are probably at a point where we would need to consider how we would fund beyond that point,” Mr Rex said.
He also noted that any delays in China, were “just normal course of business,” after Ramsay last year signed a provisional agreement with an operator of five hospitals in the city of Chengdu.
Along with its joint venture partner Sime Darby, Ramsay will partner with Chinese company Jinxin. Ramsay will have a 25 per cent stake in the final joint venture, subject to due diligence.
Mr Rex told investors at the conference about an acquisition pipeline, which he said would translate to more deals in the next 12 to 18 months.
“There are a number of acquisitions around the world which will come on or are about to come on,” he added.