Fullerton Health: reversing the value chain

The Singapore-based healthcare services provider’s upcoming listing is being billed as one of the city's most exciting equity growth stories in years.

The equity story of Fullerton Health, a Singapore-headquartered healthcare solutions provider, sends an important message to all business starters – capital is key, as are innovation and creativity.

Founded in 2011 by two medical practitioners in Singapore, Fullerton Health became the Lion City’s largest corporate healthcare services provider in just four years.

So as it prepares to go public in Singapore, investors are naturally getting excited about an equity growth story that could now be worth close to $1 billion, according to some healthcare analyst estimates.

“I have got multiple reverse enquiries on this name since [more] than six months ago,” one banker working on the initial public offering told FinanceAsia. “I have never seen this for years.”

As the company enters final preparations for the S$300 million ($220 million) IPO, bankers said Fullerton’s business model – described by some as “Healthcare 2.0” – is at the vanguard at the next wave of disruption in healthcare.

“Fullerton’s business approaches the healthcare industry in a way that is very different to its peers,” a person familiar with the company told FinanceAsia. “To start a business in the healthcare industry, one will have to build up the infrastructure first – that will either include building a clinic or a hospital, or purchasing medical equipment." Only once that is done does the job of getting patients begin, the person said.

But Fullerton has flipped the entire process by first capturing patients and building the client case. It has formed partnerships with corporations and helped their employees get access to healthcare products at an affordable cost.

In effect, Fullerton’s services help companies to save on employee health benefits, an increasingly important component of operational expenses due to rising healthcare costs.

Gaining scale

Apart from directly engaging with independent corporate clients, Fullerton also has agreements with insurance companies to cover their corporate clients – part of its strategy to expand its client base in a short period of time.

Fullerton has also been actively acquiring healthcare service providers to quickly build up scale. Between 2013 and 2015, it made 26 acquisitions and investments in Singapore, Hong Kong, Indonesia, and Australia.

That, in turn, has given Fullerton greater bargaining power when negotiating with hospitals, clinics, and pharmaceutical companies. And as the number of patients under care increases, so Fullerton will have more flexibility to operate its own clinics.

Fullerton earns retainer fees from corporations and insurance firms, and management fees from medical service providers. It also profits from medical services provided through its self-owned clinics.

Currently, Fullerton owns more than 190 medical centres that serve over 8 million people and has a network of more than 8,000 medical providers around the world, according to its website.

Fullerton, which has been conducting pre-deal investor education for its IPO since last week, could launch the share sale by the end of this month, according to bankers.

JP Morgan, UBS, Credit Suisse and DBS are joint bookrunners of the IPO.

¬ Haymarket Media Limited. All rights reserved.

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