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Business deals

Australian cancer care company Icon to buy Hong Kong practice

Goldman Sachs and Queensland government fund back Asian aggressive growth push

The deal with SunTech Medical Group will give Icon its first presence in Hong Kong.   © Reuters

HONG KONG -- Icon Group, Australia's largest cancer care treatment company, is stepping up its expansion into Asia by acquiring a Hong Kong oncology clinic.

The deal with SunTech Medical Group will give Icon its first presence in Hong Kong, following moves into Singapore and New Zealand and agreements to offer services in China, Vietnam and Myanmar.

"Cancer incidence in this part of the world is going to increase by 70% over the next decade," Chief Executive Mark Middleton told the Nikkei Asian Review. He added, "The population is aging. Hong Kong's (annual) cancer spend is expected to nearly double from 13 billion Hong Kong dollars ($1.66 billion) to over HK$24 billion by 2026 due to an aging population and increase in medical tourism from mainland China."

While he declined to disclose specific figures, Middleton said that Icon is generating annual earnings before interest, tax, depreciation and amortization "north of 100 million Australian dollars" ($68.6 million) on revenue of more than AU$1 billion.

Icon was acquired in 2017 by a consortium of Goldman Sachs, Australian state government fund Queensland Investment Corp. and Beijing-based private equity group Pagoda Investment for about AU$1 billion.

ICON CEO Mark Middleton

Icon operates 25 cancer treatment centers in Australia and an oncology hospital in New Zealand. Since buying an oncology practice in Singapore in 2016, Icon has roughly doubled patient numbers and clinic locations there. Icon employs 200 oncologists in total.

SunTech Medical's team is made up of two oncologists and two colorectal surgeons, with many of its patients coming from mainland China.

Middleton said the company hoped in the future to expand its offerings in Hong Kong and Singapore to the full portfolio of services it offers in Australia, including radiation treatment, putting together chemical mixes for chemotherapy, pharmacy management and running clinical trials for cancer treatments. The company sees both cities as regional hubs for its operations, potentially supporting future cancer center locations in adjacent areas like the Chinese city of Shenzhen.

Icon previously reached agreements with hospital groups in the Chinese cities of Qingdao and Chongqing to open cancer centers within their facilities. Middleton said the first of these centers is set to open next month, around the time Icon expects to complete its acquisition of SunTech.

To finance further growth, Middleton said Icon is in talks with banks for a loan of around AU$600 million.

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