Pacific Equity Partners (PEP) has acquired a portfolio of six private hospitals from Healthscope as part of a consortium led by Catholic not-for-profit Calvary Health Care, following Healthscope’s entry into receivership last year. The transaction marks a significant step in the restructuring of Australia’s private hospital sector, with the consortium collectively purchasing 25 hospitals for approximately A$450 million.
The assets acquired by PEP include Prince of Wales Private Hospital and Knox Private Hospital—two of Healthscope’s most profitable facilities—alongside Northpark Private Hospital, The Geelong Clinic, The Victorian Rehabilitation Centre, and Ringwood Private Hospital. These six hospitals were obtained at a reported discount, reflecting their status as some of Healthscope’s higher-performing properties.
The sale follows a series of asset divestments from Healthscope that together raised more than A$1 billion, with lenders expected to recover between 60 and 70 cents on the dollar of the roughly A$1.6 billion to A$1.8 billion owed. Earlier in the process, some lenders sold portions of their exposure at a steep discount, around 40 cents on the dollar, to hedge funds Polus Capital Management and Canyon Partners, which emerged as influential financiers in the consortium.
Calvary Health Care, in addition to the six hospitals sold to PEP, took ownership of 14 hospitals, including previously acquired Holmesglen and Hobart Private Hospitals. Other consortium participants include Acurio Health, which took three hospitals, and KnG Group, which purchased two. Meanwhile, Ramsay Healthcare acquired National Capital Private Hospital for $251 million, and $190 million was raised through the exit of Northern Beaches Hospital in Sydney.
Healthscope entered receivership after owner Brookfield, which had acquired the company in 2019 for $4.4 billion, handed control to receivers McGrathNicol last year. The receivership process was managed by McGrathNicol, with investment bank Houlihan Lokey assisting in the sale, and Jefferies advising Calvary Health Care.
Market observers note that Pacific Equity Partners’ acquisition strategy echoes a previous move by Bain Capital, which purchased Virgin Australia out of receivership before relisting it on the Australian Securities Exchange (ASX). While some speculate PEP may seek a similar public listing for its Healthscope hospitals, others believe a sale to another private equity firm or placing the business in a continuation fund to generate management fees are more probable outcomes.
The consortium’s offer ultimately prevailed over a competing bid proposing to retain Healthscope as a not-for-profit operator under lenders’ control. The deal’s final price of approximately A$450 million exceeded the initial A$400 million valuation presented in April, securing the transaction’s completion.