Ironbridge

21st October, 2003

The management team of Mayne's hospital business, led by Robert Cooke, Group General Manager, and backed by Ironbridge, CVC Asia Pacific and GIC Special Investments Pte Ltd will acquire the 53 hospitals in the Mayne Hospital Group. Consideration for the sale is $813 million.

Mr Cooke said he was delighted with this result because it will keep the hospital group together and provide significant benefits, including stability and continuity, for all stakeholders - patients, medical specialists and other referring doctors, nursing and other staff, and local communities.

"Collectively my management team and hospital directors have worked very hard to balance the primary objective of providing safe, quality patient care with business imperatives.

"All nursing, administrative, support staff and medical staff at our hospitals will be retained.

"I am delighted that our management team will be able to continue to run the group with supportive partners who share our objectives of maintaining the hospital group as the leading provider of healthcare services in Australia".

"Over the last 18 months we have managed to significantly improve the performance of our hospitals by focussing on local needs, operational benchmarking and recognising and valuing our key stakeholders, the doctors", he said. "Our new partners are committed to continuing our approach."

"As a group, the hospitals are all starting to head in the right direction, and the next phase of development and investment will provide a more robust platform for continuing growth.

"We are aiming to have a truly competitive group of hospitals that provide the very best opportunities for our doctors, nurses and staff and the highest possible standard of care for our patients so they must be hospitals that perform at the absolute peak of excellence," Mr Cooke said.

Mr Cooke pointed out that this is the largest private hospital group in Australia, catering for one in every four private patients treated in this country, in hospitals located in four states in both metropolitan and regional locations.

"We have 50 hospitals in Australia with over 5,000 beds and three hospitals in Indonesia with 600 beds. Amongst the group of Australian hospitals, there are 6 collocated and 3 privatised public hospitals where we have agreements with government that will need to be assigned. We are looking forward to working with the various state governments and health authorities to arrange a smooth transition.

"As Australia's leading provider of high acuity private services, we look forward to continuing to work with health funds to promote a vibrant and viable private hospital industry," Mr Cooke said.

Commenting on the announcement, the Chairman of Mayne's National Medical Advisory Committee, Professor David Gilett said, "That from the point of view of the doctors who use the hospitals the retention of the management structure and personnel is most significant.

"This structure was implemented 18 months ago and has resulted in significant improvements in the service for patients and doctors using the facility.

"The fact that there will be stability of management and that there will be no disruption to the running of the hospitals with the new ownership will be regarded by the Hospitals' doctors as very positive," Professor Gilett said.

The deal was jointly led by private equity managers, Ironbridge and CVC Asia Pacific Limited with additional equity provided by GIC Special Investments. The consortium members that have provided equity for this management buyout have had success in backing similar opportunities and successfully growing these businesses. Ernst & Young Mergers & Acquisitions acted as lead advisors to the consortium.

Mr Adrian MacKenzie, Director, CVC Asia Pacific said: "We are delighted to be backing Robert Cooke and his team. We have been impressed by the strength and depth of the team, and we are committed to backing their strategy for the future of the business."

Ironbridge partner, Mr Neil Broekhuizen, said "we identified this opportunity some time ago and have been encouraged by the steadily improving results delivered by management". He added, "Mayne Hospital Group is inherently attractive for a leveraged buyout as it has good growth prospects, stable revenues and solid asset backing".

Contacts:
Peter Mahon - Royce
Business: 03 9639 2300
Mobile: 0418 351 754