Temasek and Warburg Pincus seek up to $5bn for sale of healthcare company GHX

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Temasek and Warburg Pincus are preparing to put healthcare supply chain management company Global Healthcare Exchange up for sale, aiming at a valuation of almost $5bn, according to people familiar with the matter.

GHX, in which the Singaporean government-backed investment fund owns a majority stake and the US private equity group the remainder, was working with advisers on a sale process, which could result in a partial or full- stake sale, the people said. GHX is expecting to receive formal bids in the second half of the year.

The auction is the latest example of investment funds looking to offload assets in a push to realise returns on investments. Temasek has been invested in the company since 2017, while Warburg Pincus bought a minority stake in 2021.

By mid-March, private equity groups had offloaded a total of nearly $119bn in assets globally this year, through sales or public listings. This is the second-highest level in two decades but still below the same point in 2021 when a boom in sponsor-backed deal activity resulted in $211bn of exits, according to a Bain analysis of Dealogic data.

The GHX sale process was likely to draw interest from private equity groups as well as strategic buyers, but it might not result in a sale if the funds decided to hold on to the company, the people said. GHX provides cloud-based inventory, supply chain and payment management services for healthcare suppliers and providers.

Temasek and Warburg Pincus declined to comment. GHX declined to comment on “speculation” about the sale process, adding that the company was “focused on delivering innovative supply chain solutions that improve efficiency and reduce costs for healthcare providers and suppliers”.

This year, private equity groups have managed to engineer some large exits from software companies. Warburg Pincus, alongside members of the founding management team, fully exited a 90 per cent stake in electronic health records company Modernizing Medicine, selling to Clearlake Capital in a deal that valued it at $5.3bn, with the private equity group realising a nearly 10-fold return on its investment, according to people familiar with the matter.

Thoma Bravo also struck a deal to sell energy software group Quorum to Francisco Partners for $2.4bn. Blackstone is also looking to exit electronic health records company HealthEdge.

Temasek bought a stake in GHX from Thoma Bravo in 2017, valuing the business at $1.8bn. Warburg Pincus injected $500mn into the business in 2021, at which point Thoma Bravo fully exited its stake.

Temasek has $291bn of assets in its global investment portfolio, while Warburg Pincus has $87bn in assets under management.