Deal of the decade – from R65 to R14 billion in six years

Life Healthcare bought Life Molecular Imaging for $5 in 2018 and sold the company for $750 million (approximately R13.9 billion) six years later.

Life Healthcare was founded in 1983 as African Oxygen’s (Afrox) hospital division and showed strong growth in the next four decades.

This growth was achieved through acquisitions, capacity expansion in existing facilities, adding new lines of business, and developing and constructing hospitals. 

Afrox Healthcare was taken private and delisted in 2005. Five years later, on 10 June 2010, Life Healthcare was listed on the JSE and became a public company.

Today, the company is a healthcare powerhouse with 48 hospital facilities in southern Africa and 9 mental healthcare facilities.

It also boasts 7 acute rehabilitation facilities, 71 renal dialysis facilities, 5 oncology facilities, and 13 diagnostic and nuclear imaging facilities.

The company has 16,108 employees, including 3,000 doctors and other healthcare professionals. It also has 7 nursing college learning centres.

The company remains growth-focused, which includes acquisitions and partnerships to increase its footprint and services.

On 1 April 2024, Life Healthcare concluded its acquisition of the assets and operations of 41 renal dialysis units in South Africa from Fresenius Medical Care.

These units have been rebranded as Life Renal Dialysis. This acquisition significantly enhances Life Healthcare’s renal dialysis footprint.

The company also concluded a transaction with Kauffman & Partners at Life Hilton Private Hospital and Hilton Health.

This transaction will see Kauffman & Partners provide diagnostic and radiology equipment and facility services.

This transaction shows Life Healthcare’s commitment to investing in diagnostics and imaging, including nuclear medicine, in South Africa.

Life Molecular Imaging

On 13 January 2025, Life Healthcare announced it was selling its 100% interest in Life Molecular Imaging (LMI) to Lantheus Holdings.

LMI is a fully integrated research and development radiopharmaceutical company. It develops and commercialises innovative molecular imaging agents, for use globally in positron emission computerised tomography (PET-CT) diagnostics.

LMI has established a presence worldwide and built relationships with manufacturers, hospitals, imaging centres, and neurologists in the US and Europe.

Life Healthcare said the selling price was up to $750 million, which is approximately R13.9 billion based on this current exchange rate.

The purchase price included an upfront payment of $350 million and earnouts of up to $400 million contingent on achieving future milestones until 2034.

Life Healthcare anticipates that net proceeds from the upfront payment will be approximately $200 million.

Subject to the necessary approvals, the company intends to return the net upfront proceeds to shareholders.

Life Healthcare CEO Peter Wharton-Hood said their shareholders can expect a highly attractive return on this investment.

This is because the company is realising a premium over Life Molecular Imaging’s estimated value, which is reflected in the company’s share price.

Wharton-Hood told Biznews that the genesis of this deal goes back to Bayer Pharmaceuticals nearly 20 years ago.

Bayer sold LMI to Perimal Pharmaceuticals, which invested between $300 to $400 million into the company. However, they saw it as non-viable and sought to offload it.

They were looking for a company willing to nurture the asset, and Life Healthcare was seen as the right fit.

Life Healthcare acquired Life Molecular Imaging for $5 in 2018 and spent another $100 million on the company over six years.

The $100 million investment included research and development, salaries, licensing, sales, and marketing. This was the cost to turn it into a proper business.

“We invested in governance, technology, IT systems, sales platforms, and people. We even built out operations in the United States from scratch,” Wharton-Hood said.

This $100 million investment paid off handsomely, considering that Life Healthcare is set to make up to $750 million by selling the company.

“With the benefit of hindsight, the returns have been spectacular. But they weren’t without risk,” he said.

“We took that risk knowing that, while many critics said it wasn’t worth it, the industry was evolving. And now we’ve been proven right.”