Carlyle Places Bet on China Preventive Healthcare Spending
15.08.2012 -
U.S. buyout fund Carlyle Group said on Wednesday it has acquired a 13.5% stake in Meinian Onehealth Healthcare Group, placing a bet on rising spending on preventive healthcare from China's growing middle class and ageing populations.
Preventive healthcare is a 40 billion yuan ($6.3 billion) annual industry in China and is growing around 15% a year, said Carlyle managing director Janine Feng, who will have a seat on privately owned Meinian's board following the investment.
"As the Chinese population matures and becomes increasingly aware of the importance of preventive care, there is a strong domestic demand for quality preventive healthcare check-up services," said Feng.
Meinian Onehealth provides general medical examinations, disease screening and services such as doctor referrals and traditional Chinese preventive health services to individual and corporate customers.
Carlyle is acquiring new shares with its investment, which will be used for acquisitions and to fund expansion of Meinian's clinics. The company plans to open around 20 new clinics by the end of the year to take its total to around 83. Other financial terms were not disclosed.
Carlyle's current health-related investments include China's Concord Medical Service, a woundless medical service company, and the firm expects to sell insurance and nutritional products from its portfolio companies through Meinian clinics.
Year-on-year private equity investments in Asia's healthcare sector more than doubled in the first half, despite an overall slowdown in investments due to macro uncertainty, and with many firms focused on raising new funds.
Overall Asia private equity-backed deals for the first half fell 55% to $8.8 billion, but healthcare deal value doubled to $669 million, according to Thomson Reuters data.
Among deals this year, PAG invested $250 million in Bicon Pharmaceutical Holdings to become its largest investor, while KKR & Co invested $65 million for a stake of around 24% in China Cord Blood, the U.S. buyout fund's first healthcare investment in China.