Fair price for hospital purchase

The acquisition, that is valued at some RM5.67bil or US$1.35bil on a cash-free, debt-free basis, is considered reasonable given its valuation of an enterprise value to earnings before interest, taxes, depreciation, and amortisation (EV-to-ebitda) multiple of around 25 times. This is near the valuation of recent private hospital acquisitions in Malaysia.

PETALING JAYA: The potential acquisition price that IHH Healthcare Bhd is proposing to pay to Ramsay and Sime Darby Bhd to acquire the latter’s joint venture hospital chain Ramsay Sime Darby Health Care Sdn Bhd (RSDHC) appears to be competitive.

The acquisition, that is valued at some RM5.67bil or US$1.35bil on a cash-free, debt-free basis, is considered reasonable given its valuation of an enterprise value to earnings before interest, taxes, depreciation, and amortisation (EV-to-ebitda) multiple of around 25 times.