Li and Fung Considering Sale of their Healthcare Wing Which Values it at USD 500M

According to two people with direct knowledge of the situation, Hong Kong-based multinational Li and Fung Ltd is considering options for its Asian healthcare arm, including a sale that could value the business at up to $500 million.

According to the sources, Li and Fung have requested that banks pitch options for IDS Medical Systems Group (idsMED), which provides integrated solutions for medical equipment, supplies, and services. According to sources, the discussions are still in their early stages, and no decision has been made.

According to one of the sources, the options could also include an initial public offering. Both sources declined to be identified because the discussions were private.

They estimated that the Li and Fung arm, which operates in Singapore, Malaysia, Indonesia, Hong Kong, the Philippines, Thailand, China, Taiwan, and Vietnam, could be worth $400 million to $500 million in a deal.

The potential sale comes at a time when investors are betting on the ability of the healthcare sector to weather the current challenging economic environment.

Suven Pharmaceuticals, based in India, announced in December that US private equity firm Advent International would acquire a 50.1% stake in the company from its promoters, the Jasti family, and consider a merger with a peer.

KKR & Co announced a week ago that it would acquire Japanese drug developer Bushu Pharmaceuticals from Hong Kong's BPEA EQT.

idsMED began doing business in South-East Asia in 2011, partly thanks to a Li and Fung Group executive. It has since attracted strategic investors such as Singapore-based venture capital firm EDBI, the World Bank's International Finance Corporation, and Japanese trading house Mitsubishi Corp, as well as expanded into Greater China, according to its website.