KPJ Healthcare Bhd, the country's largest listed healthcare group, has earmarked mergers and acquisitions (M&As) and Islamic real estate investment trusts (REITs) in Malaysia as part of its strategic investment moves this year.
The group will also aggressively embark on new hospital management projects abroad.
Managing director Datin Paduka Siti Sa'diah Sheikh Bakir said the group was open to investment opportunities both in Malaysia and abroad.
“This is part of KPJ's ultimate goal to continue to add and create value to its shareholders,” she added.
Sa'diah told StarBiz that the group welcomed stand-alone hospitals to be part of the KPJ Group to leverage on its extensive network nationwide as well as expertise in clinical and management services.
The group also plans to establish its KPJ brand abroad via exporting management expertise and supply of healthcare professionals such as nurses and healthcare managers.
KPJ started with a single entity – Johor Specialist Hospital – in the late 1970's. To-date, the group has a network of 23 hospitals – 17 nationwide, three in Indonesia, two in Jeddah, Saudi Arabia and one in Dhaka, Bangladesh.
Sa'diah said: “KPJ has grown to be the country's leading corporate healthcare hub with annual revenue exceeding RM600mil over the past five years and charting double-digit growth annually”.
Success, however, does not come easy for KPJ. She said: “Like many other corporations, we were once hit by the Asian financial crisis in 1997 and 1998. We did not unnecessarily hive-off our non-profitable units and managed to persevere under the guidance of our holding company, Johor Corp”.
While some may perceive the group's on-going domestic M&As as “small”, she pointed out that the M&As had generated additional value, apart from the group's organic growth of 10% to 15% annually.
“We will continue to be in hot pursuit for M&As whenever the opportunity strikes. We will also expand into niche services and create centres of excellence within the hospitals,” she added.
Sa'diah said KPJ had made a strong impact in the local healthcare industry over the last five years. It had acquired and successfully turned around several private hospitals like Tawakal Hospital (Kuala Lumpur), Kuantan Specialist Hospital (Pahang), Puteri Specialist Hospital (Johor) and Bukit Mertajam Specialist Hospital (Penang).
“We are a very focussed company with an efficient operating system and a dedicated working team,” she said.
To-date, the group's flagship hospitals in Malaysia include Ampang Puteri Specialist Hospital (Kuala Lumpur), Johor Specialist Hospital, Ipoh Specialist Hospital and Damansara Specialist Hospital.
KPJ has spread its wings into hospital management abroad.
“For overseas projects, KPJ doesn't need to undergo the bidding process. Our foreign partners are convinced and satisfied with KPJ's good track record and the smooth operation of our hospitals in Malaysia,” said Sa'diah.
She said KPJ had the corporate critical mass, physical resources, financial strength and competent human capital to undertake an overseas hospital management challenge.
“In fact, we can quickly assemble a professional team to undertake an international assignment,” she added.
Sa'diah said the group was in the midst of talking to several potential partners in various parts of the world on potential hospital management ventures. “The recent two deals with the New Jeddah Clinic Hospital is one of the many examples where our expertise is sought after.”
KPJ is now managing two hospitals in Jakarta, one in Padang, Indonesia, and another in Dhaka.
On Islamic REITs, she said KPJ would continue to look at REITs as part of its expansion programme to unlock the true value of its properties. Funds raised will be used to reduce the group's gearing and seize strategic investment opportunities.
In July last year, the group injected the first six hospitals into Al-'Aqar KPJ REIT, the world's first Islamic REIT. The REIT recently won the Deal of the Year 2006 award by International Finance News based in Dubai.
Meanwhile, in a filing with Bursa Malaysia on Friday, KPJ said it planned to sell its entire interest in five hospitals and car parks to Al'Aqar KPJ REIT for about RM170mil.
The disposals would result in a cashflow for the group, which will be used to reduce borrowings.