Luxembourg-based private equity and investment firm CVC Capital Partners is set to acquire a majority stake in The Medical City (TMC), thereby resolving a long-standing dispute among the hospital’s top stakeholders. CVC Capital will take a 60% position in TMC’s Philippine assets and operations through a combination of new and existing shares. The buy-in is valued at P15 billion for TMC’s local businesses. Additionally, TMC has sent tender offer notices to minority shareholders, offering to buy their shares for a total consideration of a little over P7 billion.
CVC Capital has experience investing in hospitals and has major stakes in hospital chains in Indonesia, Vietnam, and India. After the buy-in, the firm will hold eight out of the hospital’s 15 board seats. Jose Xavier Gonzales will retain his position as board chair, and Dr. Eugenio Ramos will remain as president and CEO of the business. The deal includes TMC’s operations in Clark, Pangasinan, Iloilo, the South Luzon Hospital and Medical Center in Laguna, and the Medical Arts Tower in Pasig City, but excludes TMC’s healthcare businesses in Guam.
Gonzales and former TMC president Dr. Alfredo Bengzon, who have been involved in a dispute over the hospital’s direction since 2018, have reached an agreement with Bengzon agreeing to the entry of CVC Capital. The details of the deal have been discussed with key hospital officials, and a formal announcement will be made to other shareholders. The fresh equity from the investment is expected to be used for expansion, service improvements, and reducing debt owed to local creditors.
CVC Capital, with $133 billion worth of assets under management, has previously invested in Fast Logistics and the Landers Superstore chain in the Philippines.
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