Malaysia’s IHH Healthcare Acquires Island Hospital

By Shivangi Lahiri and Yantoultra Ngui

(Reuters) – Malaysia’s IHH Healthcare, an operator of private hospitals in Asia, announced on Wednesday that it is acquiring the local private hospital chain Island Hospital for a total value of 3.92 billion ringgit (approximately $901.15 million).

In June, it was reported that IHH and Sunway Medical Centre were among the bidders for the Penang-based hospital, previously acquired by Asian buyout fund Affinity Equity Partners in June 2015.

The proposed acquisition will enable IHH to consolidate its presence in Penang and enhance its competitive position across Malaysia, as stated in a stock exchange filing.

This acquisition marks the first by IHH’s group CEO Prem Kumar Nair, who took the lead in October. Nair, a physician with over three decades in healthcare, mentioned in a prior interview that IHH is exploring further acquisitions, including opportunities in Indonesia and Vietnam.

Nair expressed expectations of significant synergies from the transaction, estimating over 200 million ringgit in synergies over the next five years.

IHH aims to capture a bigger share of medical tourism into Malaysia, as Island Hospital is a leading institution, attracting one in three inbound foreign patients.

The acquisition will be funded through internal funds, subsidiaries, and external borrowing, with completion expected by the end of 2024.

Founded in 1996, Island Hospital is a 600-bed facility in Penang, serving 400,000 patients and performing 15,000 surgeries annually, according to its website. After the acquisition, Island Hospital will become IHH’s 18th hospital in Malaysia.

IHH, valued at $12.89 billion, operates over 80 hospitals across 10 countries, and its brands include Acibadem and Gleneagles.

Citigroup is acting as the financial advisor for IHH in this deal.

($1 = 4.3500 ringgit)