IHH Healthcare Acquires Malaysia's Island Hospital Chain for MYR 3.92B

Malaysia's IHH Healthcare, a major operator of private hospitals across Asia, announced on Wednesday that it will acquire the local private hospital chain Island Hospital in a deal worth 3.92 billion ringgit ($901.15 million) in cash. In June, Reuters reported that IHH and Sunway Medical Centre were among the bidders for the Penang-based hospital, which was acquired by the Asian buyout firm Affinity Equity Partners in 2015.

IHH stated in a stock exchange filing that this acquisition will strengthen its foothold in Penang and enhance its competitive position throughout Malaysia.

This marks the first major acquisition under the leadership of IHH's group CEO, Prem Kumar Nair, who took over the role in October. Nair, with over 30 years of experience in healthcare, mentioned in a December interview that IHH was exploring further acquisitions in Indonesia and Vietnam.

"We anticipate significant synergies from this transaction," Nair said in a separate statement.

Listed on both the Malaysian and Singaporean stock exchanges, IHH expects to generate over 200 million ringgit in synergies over the next five years following the acquisition.

Additionally, the acquisition will help IHH expand its share of the medical tourism market in Malaysia, as Island Hospital is a leader in attracting international patients, accounting for one in three foreign medical travelers to the country. The acquisition will be financed through a combination of internal funds, subsidiaries, and external borrowing, with completion expected by the end of 2024, according to IHH's filing.