IHH Healthcare to divest medical education arm

IHH Healthcare Berhad today announced it has entered into a definitive agreement for the sale of its medical education arm, International Medical University (“IMU”), for a total enterprise value of RM1,345 million (US$306 million). The sale includes a hospital that IMU owns, which is under construction.

On 7 June 2022, IHH entered into a sale and purchase agreement for the divestment of 100% of IMU to a consortium of investors led by The Rise Fund, TPG’s multi-sector global impact investing platform, and the Hong Leong Group. IMU is the largest medical and healthcare-focused higher education institute in Malaysia and its under-construction hospital will be acquired by Columbia Asia as part of the transaction. The transaction is expected to complete by 1Q 2023, subject to the fulfilment of certain conditions precedent.

This divestment is a continuation of the Group’s execution of its strategy to drive capital-efficient growth, which includes an ongoing review of its portfolio and capital deployment to prioritise returns and focus on long-term core assets. With the monetisation of this asset, IHH will focus on strengthening its healthcare operations in existing markets, and extending its footprint into new adjacent markets based on its cluster strategy approach and which it has good operating knowledge of.

Dr Kelvin Loh, Managing Director and CEO of IHH, said, “IMU has played an important role in nurturing medical personnel and developing healthcare capabilities and expertise for 30 years in Malaysia. It will continue to make a strong contribution to the sector under new ownership. This recalibration of our portfolio is a considered decision as part of our new strategy; we will deploy the proceeds to optimise our operations and clinical services plus invest into new growth peaks for IHH.”

Tunku Ali Redhauddin Tuanku Muhriz, TPG Senior Advisor, said, “IMU is uniquely positioned in the region as Malaysia’s first and best-in-class fully private medical education institution, and through The Rise Fund’s investment, TPG is delighted to be a part of its next chapter of growth, in developing future generations of international and domestic healthcare professionals, to meet the fast-growing demand for healthcare in Malaysia and beyond. This investment is part of a thematic focus globally on professional education in the medical sector and will be a strong addition to the extensive healthcare and education portfolio that TPG has both globally and in Malaysia.”

Select TPG investments in healthcare and education sectors in Malaysia include Gribbles, Lablink, Clinipath and Quantum – as part of Pathology Asia – Columbia Asia, CVSKL, Beacon and Alty, as well as Sri KDU, Real Schools and GEMS as part of XCL Education. The investment in IMU is The Rise Fund’s second medical education investment this year. In February, through investments in the Burrell College of Osteopathic Medicine and Idaho College of Osteopathic Medicine, The Rise Fund launched the Center for Health Education and Access, a new, integrated, mission-driven osteopathic education platform in the US. MarketScreener