Singapore's Fullerton Health completes RRJ Capital-led merger

Fullerton Health

Singapore-based Fullerton Health Corporation on Thursday announced the completion of its merger with Fullerton Healthcare following an equity injection by Asian buyout firm RRJ Capital, according to an announcement.

RRJ Capital has become the majority shareholder of Fullerton after the equity and debt injection totalling S$390 million (about $283 million) to the pan-Asian health provider. The deal also calls for a new corporate structure.

The merger, which received approval by 85.8% of shareholders on May 5, 2022, combines Fullerton Healthcare with Fullerton Health, with the latter continuing as the surviving entity.

David Sin of SIN Capital and two other co-founders of Fullerton Healthcare, Dr Michael Tan and Dr Daniel Chan, will no longer be involved with the board following the merger. The two doctors withdrew a petition filed in January to wind up the company.

Last year, Fullerton Healthcare had sought bids for a sale of the company in a process that had attracted private equity firms in a potential deal that valued it at about $1 billion before the dispute scuppered the sale process, Reuters reported.

The terms of the merger showed that RRJ, founded by the brothers Richard and Charles Ong, has subscribed for S$140 million of new ordinary shares in Fullerton Health, while the company has entered into a senior loan facility agreement for S$250 million with three banks.

RRJ’s existing perpetual securities and convertible preference shares have been cancelled and offset against S$180 million worth of new shares issued by Fullerton Health, as well as subordinated debt and cash, per the announcement.

The deal makes RRJ, which has over $15 billion of long-term capital under management, the company’s majority shareholder. The remaining stakes are held by shareholders, such as Ping An Capital, who have elected to roll over.

Fullerton Health operates in nine markets with a strong presence in Singapore, the Philippines, and Indonesia. It owns over 550 facilities and has more than 6,000 employees.

For the financial year ended December 31, 2021, Fullerton Health’s revenue crossed S$800 million, with a healthy EBITDA margin at the mid-teens and net profits.

The merger will allow the company to cut borrowings substantially, increase working capital, and have more flexibility to raise funds, Fullerton said.

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