…. So Is Symbion
First it was Primary Health Care which attempted a ‘nil premium’ merger of equals with Symbion Health but failed. Now Healthscope has linked up with two private equity funds to offer a suggested $4.30 a share for Symbion in what is the long awaited next round of rationalisation of this sector.
The suggested bid at $4.30 a share from Healthscope (HSP) and the two local buyout firms, Ironbridge Capital and Archer Capital (which took over Rebel Sport) values Symbion at $2.8 billion.
Symbion said the now usual words for a deal involving private equity buyers: The offer was “unsolicited, incomplete and non- binding,” but was obviously complete enough for a suggested price of $4.30 to be revealed
Symbion shares closed at $4.11 on Monday and have been rising steadily recently as speculation grew about the shape of the company’s future.
The two buyout companies will take control of Symbion’s (SYB) pharmacy and the pharmaceutical and other products distribution business, a move which will delight rivals Australian Pharmaceutical Industries (API) and Sigma Pharmaceuticals because they will be joined by a financial and not a trade buyer who might have been prompted to cut margins to build market share.
Instead the businesses to be acquired from Symbion will be loaded up with debt like all good buyout deals and be run for cash flow and not earnings.
It would also rule the two companies out of launching a bid for the struggling API unless they want to be a consolidator in the drugs and pharmacy distribution business.
