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EQT-backed Icon Group receives buyer approaches for Greater China business; carve-out possible – sources

Icon Group, an Australian integrated cancer care provider backed by one of EQT’s infrastructure funds, has been approached by potential buyers for its Greater China business, according to two sources familiar with the situation.

It is still early days, according to the first source, while the second source said that the company has not made a decision to sell yet.

There has been recent market chatter that Icon Group is exploring a potential carve-out of its mainland China and Hong Kong operations, with Morgan Stanley engaged as financial advisor to help gauge the interest of potential suitors, two other sources said.

The oncology service provider has collected non-binding offers from a few interested parties, the third source added.

In late 2019, Icon became the first Australian healthcare company to deliver cancer care treatment in mainland China at its first Icon Cancer Centre in Jiangxian in Shanxi province. Currently, it has a total of five centres in mainland China, according to its website.

It entered Hong Kong via the acquisition of local peer SunTech Medical Group in November 2019. It has two Icon Cancer Centre offering oncology services and two Icon Specialist Centre for colorectal cancer care provision in the metropolitan city at present, as per its website.

Icon Group and EQT declined to comment. Morgan Stanley did not respond to request for comment.

Icon became a portfolio company of EQT Infrastructure Fund V in March 2022 after the Nordic buyout firm acquired a 70% stake in the business from a vendor consortium including Goldman Sachs Asset Management, QIC and Pagoda for AUD 2.4bn (USD 1.7bn) including debt, according to Mergermarket’s database.

Established in 2015, the company offers a mix of cancer care services, for example medical oncology, radiation oncology, haematology, pharmacy and chemotherapy compounding, to deliver an end-to-end seamless service for patients, according to its website.

Icon is Australia’s largest dedicated cancer care provider and has expanded globally into Singapore, Mainland China, Hong Kong and New Zealand, as per its website.

It was also seeking to enter Malaysia through partnerships in different formats including direct equity investments, Mergermarket reported in January 2023.

According to Mergermarket’s Likely-to-Exit (LTE) algorithm, Icon Group itself has a score of 23 out of 100. Mergermarket‘s LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a de-SPAC transaction.