KKR’s $680 Million Investment in Metro Pacific Hospitals

Simpson Thacher represented KKR in its investment in Metro Pacific Hospital Holdings, Inc. through a series of investments in common shares in Metro Pacific Hospitals and in mandatorily exchangeable bonds issued by Metro Pacific Investments Corporation.

Under the terms of the agreement, the KKR-led consortium will subscribe to Php 5.2 billion (US$ 100 million) worth of 41,366,178 new common shares in Metro Pacific Hospitals equivalent to 6.25% of the aggregate par value of the company. Proceeds from the sale of shares in Metro Pacific Hospitals are expected to be used to support its potential investments in additional hospitals and new healthcare businesses.

As part of MPIC’s wider financing arrangements, the KKR-led consortium will also invest in a Php 30.1 billion (US$ 580 million) mandatorily exchangeable bond issued by MPIC. The exchangeable bond shall grant the KKR-led consortium the right to exchange the bond for 239,932,962 common shares in Metro Pacific Hospitals on the sooner of 10 years or an initial public offering, which may be considered after further development of the business. The transactions are expected to complete by the end of 2019. KKR will make this investment from its Asian Fund III.

Bank of America Merrill Lynch and UBS acted as financial advisors to MPIC and GIC. Milbank LLP and Picazo Buyco Tan Fider & Santos acted as legal counsels to MPIC and GIC. Simpson Thacher & Bartlett LLP and Sycip Salazar Hernandez & Gatmaitan acted as legal counsels to KKR.

The Simpson Thacher team included Ian Ho (Picture), Sandra Kister, Erik Wang, Nelson Tai and Chen Zhang (M&A); and Katharine Moir and Joseph Tootle (Tax).

Involved fees earner: Ian Ho – Simpson Thacher & Bartlett; Sandra Kister – Simpson Thacher & Bartlett; Katharine Moir – Simpson Thacher & Bartlett; Nelson Tai – Simpson Thacher & Bartlett; Joseph Tootle – Simpson Thacher & Bartlett; Erik Wang – Simpson Thacher & Bartlett; Chen Zhang – Simpson Thacher & Bartlett;

Law Firms: Simpson Thacher & Bartlett;

Clients: KKR;

Author: Michael Patrini