Billion Dollar Brazil Healthcare Buyout


January 9, 2014

This week’s deal of the week is a rumored proposed USD 1.2 billion take private of Brazil-based Fleury SA. Several PE groups are bidding for the hospital and medical service providers, which Bloomberg describes as the worst performing stock in its category in recent times. PE bidders include Carlyle Group and KKR. The report says that Gavea Investimentos and Apax Partners have also looked at Sao Paulo-based Fleury.


This healthcare deal is interesting because with one single transaction, Brazil out-punches US sector activity for 2013.  It says a lot about the low level of healthcare industry activity in the US and the PE view that there are better opportunities in faster growing emerging BRIC countries.  According to S&P  Capital IQ Global Markets Intelligence, the entire US leveraged buyout market for healthcare sector generated only USD 1 billion in transactions in 2013 (see graphic), the lowest turnover in the last 13 years.


The numbers in 2014 for the US healthcare sector could be quite different compared to last year, that is, if Carlyle is successful in its bid to acquire a diagnostic unit from Johnson & Johnson for USD 4 billion. The rumored mega-buyout was reported by Reuters last week and is expected to reach a closing in mid-January. (Image source: Fleury; Graphic source S&P)

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