KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas), the government-linked private equity fund management company, has made its maiden entry into the healthcare sector by investing RM79.8mil in two third party administrators (TPA) managing medical claims.
It said in a statement that it had acquired 60% equity in the MediExpress Group (MediExpress), which consists of MediExpress (M) Sdn Bhd and Health Connect Sdn Bhd, and another 60% equity in PMCare Sdn Bhd.
According to Ekuinas, MediExpress is a leading managed care organisation (MCO) which operates as a TPA for insurance companies and small medium enterprises segment, while PMCare is the leading bumiputra TPA service provider, focusing on the corporate client segment.
“The two companies shall later be merged under one holding company, to create the largest TPA provider in Malaysia with 40% market share and servicing more than 2 million members,” it said.
Ekuinas chairman Raja Tan Sri Arshad Raja Tun Uda said the healthcare sector was one of Ekuinas’ six identified target sectors for investment.
“The TPA market forms a fast growing sub sector with a current estimated size of RM100mil and is expected to grow by 10% per annum to reach RM156mil in 2019,” he said.
He added that MediExpress and PMCare provided a platform for Ekuinas to form the leading TPA service provider in Malaysia and regionally in line with its mandate to create “future market leading companies.”
Originally incorporated in 1998 for the purpose of managing Sihat Malaysia under the initiative of 39 insurance companies, MediExpress led by Paul Cheok focuses on managing inpatient benefits on behalf of insurance companies and, through Health Connect, services outpatient benefits administration needs.
The group now has more than one million members across a health provider network of over 3,000 clinics and 150 hospitals.
PMCare, which is led by bumiputra entrepreneurs Wan Shukri Ariffin and Adzahar Abdul Wahid, specialises in the administration of corporate clients’ medical benefits and caters to over 600,000 members across more than 3,000 medical providers nationwide.
Together, these companies generated a combined revenue of more than RM50mil in the 2014 financial year.
Ekuinas chief executive officer Datuk Abdul Rahman Ahmad, who will retire next month after helming the private equity firm since its inception, said it planned to leverage on each TPA provider’s strengths to provide value-added services through a proprietary high technology platform to further expand their business and grow regionally.
Ekuinas also announced that it had undertaken a RM70mil follow-on investment in Orkim Sdn Bhd to help the company finance the acquisition of three additional clean petroleum product (CPP) tankers.
It said this raised the number of vessels owned by Orkim to 14, making it the largest CPP transportation provider in Malaysia, with an estimated market share of 24%.
Ekuinas had in December 2014 committed an investment of RM346.3mil for a 95.5% stake in Orkim as part of its strategy to create a leading regional downstream petroleum transportation and logistics group.
With these latest investments, Ekuinas has undertaken a total of 38 investments since its inception in 2009. Together with co-investments from private sector partners, Ekuinas has facilitated a total economic deployment of RM3.2bil, it said.
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