This article first appeared in The Edge Financial Daily on April 4, 2019 - April 10, 2019
KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas) has divested its entire 60% equity interest in third-party claims administrator service providers, MediExpress Group and PMCare Sdn Bhd, to Sumitomo Corporation.
The group did not disclose how much it was paid for the stake, but said it would generate a minimum internal rate of return of 38.8%.
This latest divestment, it added, brings Ekuinas’ total realisation proceeds to more than RM2 billion.
In a statement yesterday, Ekuinas said it invested in MediExpress and PMCare in 2015, which marked the group’s first foray into the healthcare sector.
MediExpress, which comprises MediExpress (Malaysia) Sdn Bhd and Health Connect Sdn Bhd, as well as PMCare are primarily focused on managing both inpatient and outpatient benefits on behalf of their clients.
While MediExpress focuses on insurance companies, PMCare services mainly corporate clients. Together, they cater to over two million members across more than 3,000 medical providers in Malaysia, said Ekuinas.
“Over the investment period, Ekuinas has successfully delivered on its value creation plans for both MediExpress and PMCare,” Ekuinas chief executive officer Syed Yasir Arafat Syed Abd Kadir said in the statement.
“These efforts comprise operational enhancements of processes and systems, strengthening management and operation teams as well as increasing their market share,” he said.
“Through this divestment, Ekuinas will generate a minimum internal rate of return of 38.8%,” said Syed Yasir.
“We were very focused on ensuring that their next partner would be well-equipped with the right capabilities and vision to continue charting the companies’ positive future. Sumitomo is at the forefront of the healthcare services industry and their reputation and experience will bode well for the growth of MediExpress and PMCare,” he added.
Following this exercise, Sumitomo will emerge as the majority shareholder in both MediExpress and PMCare.