Ayala weighs options on Qualimed venture

QUALIMED Iloilo

Conglomerate Ayala Corp. is considering to vie for the chain of Qualimed hospitals and clinics jointly put on the auction block by its property arm Ayala Land Inc. and the Mercado hospital group, finding potential synergy with its burgeoning healthcare business.

It was earlier reported that Qualimed Healthcare Network, which has four operating hospitals with a combined capacity of 456 beds plus at least seven other outpatient facilities around the country, is being pitched to new investors. Metro Pacific group, one of the country’s leading hospital chain operators, is among those looking at the business.

The Mercado group, which is no longer keen on this capital-intensive venture, is leading the discussions on the divestment. It owns 60 percent of the venture, which was formed in 2013, while Ayala Land owns the remaining 40 percent.

“We’re participating in the process and considering if we will put in a bid or not,” Paolo Maximo Borromeo, head of AC Healthcare Holdings, told reporters Friday night.

“For us, we’re trying to implement a fair process wherein our partner (Mercado) and Ayala Land go to the market to try to get the best bid. And from Ayala Corp. or AC Health’s perspective, we will consider participating, so at least it’s fair.”

As to why the Ayala group has to go to the entire gamut of bidding through an auction instead of Ayala Land just exercising the right of first refusal on the Mercados’ stake, industry sources said this route was considered but there was a huge disparity in the price at which the Mercados were willing to sell and that at which Ayala Land was willing to buy.

By jointly offering their combined stake in Qualimed to other investors, this is seen to get the best pricing for the Qualimed business. If another party were to offer a very good price for this business, industry sources said the Ayala group would have no qualms about letting it go.

For Ayala Land, the primary purpose of investing in hospitals was to complete the amenities in its mixed-use estates. To date, Qualimed’s four operating hospitals are located in Iloilo, Bulacan, Nuvali and Batangas.

In its Azuela Cove estate in Davao City, which was launched last year, however, Ayala Land allowed St. Luke’s Medical Center to put up a new facility instead of bringing the Qualimed brand.

At the conglomerate or AC Healthcare level, Borromeo said the group was interested in investing in hospitals as this could complement FamilyDoc, a new business unit that combines pharmaceutical retailing and medical services into community-based retail clinics.

“It makes sense that when you have clinics, you can refer patients to in-patient facilities as needed,” Borromeo said.

AC Healthcare’s capital outlays this year are expected to reach at least P500 million to as much as P1 billion just to expand FamilyDoc as well as Generika, the country’s third-largest drugstore chain and a pioneer in the local distribution of generic medicine.

Borromeo aims to expand FamilyDoc’s network to 50 by yearend from 22 at present. This brand is now operating in Laguna, Cavite, Las Piñas, Parañaque, Taguig, Pateros and Pasig. It will soon debut in Quezon City and Marikina. “We have gone from south to north,” he said.

Generika plans to open 150 new stores this 2018 to end the year with 900 branches, said Jay Ferrer, vice president for operations at Actimed Inc. which operates the Generika business. Of the 750 Generika branches to date, about 86 percent are franchised.

The cost to open each Generika store is around P1.5 million, which is the same amount needed to open a franchised store, Ferrer said.

The group is looking to attain half of the store expansion for 2018 through franchising, Borromeo said.

The target is for Generika to breach the 1,000-store network by 2020. —DORIS DUMLAO-ABADILLA