New York-listed New Frontier to buy China's United Family Healthcare for $1.44b

UFH is expected to be given the exclusive right to manage New Frontier Group’s 64,000 sqm flagship Shenzhen city center hospital.

New York-listed New Frontier Corporation (NFC), a public investment vehicle sponsored by New Frontier Group, has acquired Chinese premium private healthcare operator United Family Healthcare (UFH) for a total value of $1.44b, an announcement revealed. NFC will acquire UFH from its existing shareholders, including affiliates of TPG and Fosun Pharma, to create one of China’s largest publicly listed integrated healthcare services companies.

The new company will operate under the name of New Frontier Health Corporation (NFH) and will pursue organic expansion and strategic acquisitions.

NFC has raised $478m through an initial public offering (IPO) to fund the acquisition and has obtained $711m in equity commitments (at $10 per share) from investors including Vivo Capital, Nan Fung Group, and a group of strategic investors and global asset managers. NFC is expected to utilize at least $565m in support of the acquisition.

In addition, investors representing $90m of cash held in NFC’s trust account have committed not to exercise their redemption rights with respect to their shares. Existing management of UFH and Fosun Pharma, will roll a portion of their ownership in UFH and together are expected to own an aggregate of approximately 12% of NFH at closing. 

As part of the transaction, UFH is expected to be given the exclusive right to manage New Frontier Group’s 64,000 sqm flagship Shenzhen city center hospital, which will anchor UFH’s asset-light management strategy.

Following the close of the transaction, NFC chairman Antony Leung will become chairman of the NFH's board of directors, Fosun Pharma chairman Qiyu Chen will be co-chairman, whilst UFH founder Roberta Lipson will be the CEO of NFH. NFC CEO Carl Wu will lead a new executive committee of the board.

Upon closing of the transaction, the company is expected to trade on the New York Stock Exchange under the symbol “NFH”.

Credit Suisse and UBS AG are serving as capital markets advisors and Winston & Strawn LLP, Simpson Thacher & Bartlett LLP, Kirkland & Ellis LLP, and Global Law Office are acting as legal advisors to NFC. Cleary Gottlieb Steen & Hamilton LLP and Fangda Partners are acting as legal advisors to TPG, Paul Hastings is acting as legal advisor to Fosun Pharma and Hughes Hubbard & Reed LLP is acting as legal advisor to Roberta Lipson.