IHH Terminates The RM5.67 Billion Ramsay Sime Darby Acquisition Plan

IHH which had initiated preliminary discussion on the interest in acquiring 100% of Ramsay Healthcare and Sime Darby Holdings back in March 2022, has issued a statement saying that the discussion has not resulted in a binding agreement, in other words, it has been terminated.

Ramsay Healthcare which owns and operates Sime Ramsay hospitals was in the news when IHH Healthcare back in March 2022 confirmed a confidential, conditional, non-binding, indicative proposal was submitted to Ramsay and Sime Darby Holdings Berhad to acquire 100% of Ramsay and SDH’s 50:50 Asian joint venture company known as Ramsay Sime Darby Health Care Sdn Bhd.

Under the indicative proposal, IHH listed the conditional indicative enterprise value for Ramsay Sime Darb as RM5.67 billion (or US$1.35 billion on a cash-free, debt-free basis.

At that time, RHB Research said it was upbeat about the prospects over the longer term as Ramsay Sime Darby Health Care SB’s assets are a strategic fit with IHH’s cluster strategy and presents an entry into the Indonesian markets.

The research house said that it believes RSDH augurs well with IHH’s cluster strategy to solidify its market share and expand its presence in the metro areas of Malaysia, given certain RSDH’s hospitals lie outside of IHH’s existing catchment area, thereby allowing for future expansion.

“Integration of the assets provides future potential cost synergies via procurement and shared services. Additionally, RSDH’s presence in Indonesia would serve as a beachhead in the underserved Indonesian market, where hospital beds per 1,000 individuals stand at 1.2 (among the lowest in ASEAN). On valuation, the indicative enterprise value implies an EV/EBITDA ratio of 21.8x”.

In a Bursa filing, IHH said “the Board has announced that discussions between IHH, Ramsay, and SDH have concluded and that the discussions have not resulted in a binding agreement.”

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