Introduction

We are pleased to share with you a summary update of market valuations and activities in the Asia Pacific healthcare industry (equipment and services) for the first half of 2019.

Valuations of Asia Pacific’s public companies have decreased over H1 2019 compared to the same period in 2018. Average EBITDA was 24.7x by the end of Q2-2019 vs. 27.3x in Q2-2018 – a decrease of nearly 10% year-on-year.

Key Industry Statistics and Ratios (CapitaI IQ Constituents)

Based on 400-500 selected companies, the table above illustrates that industry returns (along with the companies’ margins and leverage ratios) have been stable over the past five years.

M&A Deal Announced Per Quarter

M&A activity by volume has been relatively consistent over the last 6 quarters with c. 60-75 transactions (majority stake only) per quarter. The year 2018 was characterised by a few mega-deals (e.g. Healthscope) pushing up the total transaction volume for the year.

Selected M&A Transactions H1 2019 (USDm)

Armor selected the largest M&A transactions across the region in 2019 H1 for which information on Implied Enterprise Value was available. The data shows that investors pay relatively high multiples for acquisitions in the sector in Asia.