Private equity firms compete for HK-based Longreach’s medical device maker Quasar

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25th May 2023 – (Hong Kong) Private equity firms Boyu Capital, Hillhouse Capital, and BPEA EQT are among the bidders vying for Longreach Group‘s Hong Kong-based medical device maker Quasar, according to three sources with knowledge of the matter. Longreach, an Asia-focused private equity firm, is seeking a valuation of up to $600 million for the entire company, said one of the sources and a separate person familiar with the transaction. The bidding process, which is being overseen by Goldman Sachs, has entered the second round, the three sources said.

The sources requested anonymity as the deal talks are confidential. Quasar, Longreach, Boyu, and Hillhouse declined to comment, while BPEA EQT and Goldman Sachs did not respond to a request for comment.

Bidders are currently conducting due diligence on the company, with final bids expected to be submitted by the end of June, according to two of the sources.

In addition to the private equity firms, strategic buyers are also expressing interest in Quasar. General Atlantic is reportedly among the potential bidders, according to the fourth source and two others with knowledge of the matter. General Atlantic declined to comment.

The sale process comes at a time when medical services companies are gaining popularity among investors, with many betting on the healthcare sector’s resilience in the face of challenging economic conditions.

Founded in Israel in 1988, Quasar is a global contract development and manufacturing organisation (CDMO) that specialises in advanced medical devices. The company boasts Johnson & Johnson and Medtronic PLC among its clients, as stated on its website. Quasar has two manufacturing facilities in China and one in Thailand.

Longreach acquired a controlling stake in Quasar in 2019 for an undisclosed amount. According to one of the sources and a seventh source familiar with the transaction, Quasar’s earnings before interest, taxes, depreciation, and amortization were approximately $30 million in 2022.

The medical device industry has been growing rapidly, driven by technological advancements and an aging population in many parts of the world. According to a report by Grand View Research, the global medical device market is expected to reach $612.7 billion by 2025, growing at a compound annual growth rate of 5.4% from 2018 to 2025.