Life Healthcare set to sell R19 billion UK assets

Icon Infrastructure is nearing a deal to acquire some UK assets being sold by South African hospital operator Life Healthcare Group, people with knowledge of the matter said. 

The investment firm is in advanced talks about the terms of a potential deal for its UK diagnostics business known as Alliance Medical Group, and an announcement could be made in the coming days, according to the people.

Alliance could be valued at about R19 billion ($1 billion) in a deal, they said. 

Johannesburg-based Life Healthcare has been working with advisers to identify potential suitors for all or part of the UK operations, Bloomberg News reported earlier.

The Alliance Medical Group provides imaging services and is also present in European countries, including Germany, Ireland, Italy, the Netherlands, Norway and Spain, according to its website. 

Deliberations are ongoing and could still be delayed or falter, and another buyer may still emerge, the people said, asking not to be identified discussing confidential information.

A representative for Life Healthcare declined to comment, while Icon didn’t provide comment. Life Healthcare said last week that it was still working to determine whether a sale is possible. 

Life Healthcare agreed to buy Alliance Medical in 2016 for as much as £800 million ($975 million). South African hospital chains expanded into the UK to take advantage of demand for private health care in a country dominated by the state-run National Health Service. 

However, growth opportunities in their home market have prompted some of these firms to refocus.

Netcare exited its UK business BMI in 2018, while Mediclinic International last year sold itself to a consortium led by billionaire Johann Rupert in a £3.7 billion deal.