Bupa buys Dental Corp

Singapore-based Fortis Healthcare has offloaded its 64 per cent stake in Australia’s largest provider of dental services, Dental Corporation, for $270 million to UK’s Bupa.

Fortis, backed by Indian billionaire brothers Malvinder Mohan Singh and Shivinder Mohan Singh, paid $100 million for a 30 per cent stake in Dental Corp in December 2010. It upped its investment to a majority stake in 2011, which valued Dental Corp at about $400 million.

Fortis said in a statement on Monday the sale to Bupa was in line with its strategic direction to focus on health care in Asia, including India.

“The move is good for Fortis as it aligns the company with its current strategic priorities,” the company said. “This will help consolidate our presence as one of the fastest growing health care companies in the region.”

When Fortis upped its stake, the idea was to consolidate Australia’s fragmented dentist market.

It grew the business from 142 dental practices in Australia and New Zealand to 190, and entered the Canadian market. But it said it was unable to expand into other countries as originally envisaged.

Fortis recently entered into a strategic tie-up with Majid Al Futtaim Healthcare, the health care arm of Majid Al Futtaim Ventures, to operate and manage its health care assets in Dubai.

Dental Corp has engaged Moore Stephens to prepare an independent expert’s report to advise on whether the deal is in the best interests of security holders.

Bupa plans to buy 100 per cent of Dental Corp via a scheme of arrangement.

Fortis and financial investors will be entitled to receive $2.347 a share and management and dentists will be entitled to receive 93.88¢ a share plus three annual earn out payments over the next three years.

The Bupa deal is expected to be completed in March 2013 subject to shareholder and regulatory approvals.

Bupa was advised by Merrill Lynch and Herbert Smith Freehills, while Dental Corp was advised by Asia Principal Capital Ltd, Religare Capital Markets and Minter Ellison.