Mainboard-listed Thomson Medical Group A50 has agreed to acquire Vietnam’s FV Hospital for up to US$381.4 million ($517.1 million), making this the largest healthcare acquisition in Southeast Asia (SEA) since 2020.
On July 11, Thomson Medical and FVH Singapore had entered into a sale and purchase agreement (SPA) with Far East Medical HK on July 11 where the former agreed to purchase 100% of the issued charter capital of Far East Medical Vietnam. FVH Singapore is a wholly-owned subsidiary of Sasteria, which is a wholly-owned subsidiary of Thomson Medical Group.
Far East Medical Vietnam operates a range of healthcare facilities in Vietnam including FV Hospital and a network of primary and specialist clinics.
FV was founded by Dr Jean-Marcel Guillon in 2003 with a group of French physicians who wanted to bring world-class healthcare into Vietnam. FV Hospital, which is located in Ho Chi Minh City’s district seven, is now a full-service, one-stop healthcare provider for local patients as well as patients from Cambodia.
Based on the initial consideration of approximately US$359.6 million and after price adjustments, this translates into an enterprise value (EV) of US$328.5 million. Based on FV’s FY2022 ebitda of US$19.5 million, this translates into an EV/ EBITDA of 16.8x. For the FY2022, FV reported a net profit after tax (NPAT) of VND271.4 billion ($15.5 million). Its net tangible assets (NTA) stood at VND937.6 billion ($53.5 million).
According to Thomson, the proposed acquisition is in line with its objective to grow its pan-Asian footprint. As the group’s largest strategic acquisition, FV Hospital will unlock the “sizeable Vietnamese opportunity” for the group.
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From 2017 to 2022, the country recorded strong historical gross domestic product growth at a compounded annual growth rate (CAGR) of around 8.6%. The country’s healthcare expenditure growth stood at a CAGR of 9.2% over the same period.
The group was already said to be in advanced talks to buy a controlling stake in Vietnam’s FV Hospital in early June.
The purchase will be funded via Thomson’s internal resources and external borrowings from financial institutions and debt capital markets.
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FV Hospital and New H Wing / Photo: Thomson Medical
“The acquisition of FV Hospital deepens our commitment to the Southeast Asian healthcare sector, expanding our group’s presence across three of the region’s most important geographies in healthcare. FV Hospital provides a strategic foothold for us in Vietnam and a gateway to grow and focus on future investments in this fast-growing market,” says Kiat Lim, Thomson Medical Group’s executive vice-chairman. Lim, the son of billionaire Peter Lim, was the one who first initiated discussions with FV Hospital around six months ago.
“FV Hospital has been extremely successful in the past two decades in establishing itself as a premium general hospital. As part of TMG, we hope to work together to take their growth plans to the next level – moving in-step with the domestic and medical tourism market momentum in Vietnam,” he adds.
“We would like to express our appreciation for the support and collaborative partnership we have had with Quadria. Together, we have embarked on a journey that has helped propel FV to its current position as a leading healthcare provider in Vietnam. With the support of Thomson Medical moving forward, I am incredibly excited for the next phase of FV’s growth journey. Together, we will continue to chart a path of continued success and shape the future of healthcare in Vietnam,” says Guillon, the founder and CEO of FV Hospital.
Shares in Thomson Medical Group last traded at 6.1 cents before its trading halt on the morning of July 12.
