Carlyle to buy Australia's Healthscope for $1.7bn

Private equity firms TPG and Carlyle have won a bidding war for Australia's Healthscope Ltd, agreeing to pay $1.73bn for the hospital owner in the country's largest buyout deal since 2007. Kohlberg Kravis Roberts & Co was trumped by a higher-than-expected offer by TPG and Carlyle following last-minute negotiations at the weekend with the board of Healthscope, Australia's second-largest hospital operator after Ramsay Health Care US-based TPG and Carlyle offered A$6.26 a share, worth A$1.99bn ($1.73bn), a higher-than-expected premium that sent Healthscope shares 11 per cent higher on Monday and highlighted growing offshore interest in Australian healthcare. The health care sector is hotly sought after for growth in Australia, where the population is expanding and ageing, and the government is pushing patients to use private healthcare.

"There are disappointed parties here and there is an attraction to the thematics of the space. The aging population, particularly the baby boomers, are about to reach their peak health consumption years," UBS analyst Andrew Goodsall said. Healthscope's 43 hospitals represent 15 per cent of Australia's private hospital market, and has the country's third-largest pathology business. Australian healthcare spending rose 9 per cent to more than A$100bn a year in 2007-08, according to government figures. Healthscope is not the only sought after company in Australia's healthcare sector.