Key Factors
- Life Healthcare sells its curiosity in Life Molecular Imaging to Lantheus Holdings for R6.48 billion ($350 million), marking a strategic shift.
- The deal contains potential milestone funds as much as $400 million primarily based on LMI’s future gross sales efficiency, extending by way of 2034.
- Life Healthcare expects a internet return of R3.7 billion ($200 million), with proceeds to be distributed to shareholders inside 12 months.
Life Healthcare Group Holdings Restricted, a South African non-public healthcare supplier led by medical physician and enterprise government Victor Litlhakanyane, has agreed to promote its oblique curiosity in Life Molecular Imaging (LMI) to U.S.-based Lantheus Holdings Inc. for R6.48 billion ($350 million). The transaction, introduced on Jan. 12, 2025, marks a strategic shift for Life Healthcare, which has invested considerably in LMI since buying it in 2018.
Underneath the settlement, Life Healthcare will obtain an upfront cost of $350 million on a cash-free, debt-free foundation, topic to working capital changes. The deal additionally contains the potential of incomes as much as $400 million in milestone-based funds tied to LMI’s future gross sales efficiency, extending by way of 2034. This construction permits Life Healthcare to retain a stake in LMI’s ongoing success.
After accounting for transaction prices, administration incentives, and profit-sharing obligations, Life Healthcare expects a internet return of roughly R3.7 billion ($200 million). The proceeds are earmarked for distribution to shareholders inside 12 months of the deal’s completion, pending board approval.
Life Healthcare refocuses on core operations
This transfer aligns with Life Healthcare’s broader technique to concentrate on its core operations in Southern Africa. Following its sale of Alliance Medical Group in 2024, the divestment of LMI represents one other step towards streamlining operations and enhancing monetary stability. Regardless of exiting LMI, Life Healthcare will keep industrial ties by way of a sub-license settlement with Lantheus, doubtlessly unlocking additional financial advantages.
Life Healthcare acknowledged that whereas it has invested $66 million into LMI’s improvement, it’s not greatest suited to supervise the radiopharmaceutical firm’s long-term development. Lantheus, a worldwide chief in nuclear drugs, is seen as higher outfitted to scale LMI’s operations and develop its portfolio, together with its flagship Alzheimer’s diagnostic software, NeuraCeq, and different imaging brokers in late-stage trials.
For shareholders, the sale affords fast monetary returns whereas eliminating the capital expenditure and dangers related to LMI’s future improvement. This resolution additionally displays Life Healthcare’s concentrate on delivering value-based care inside its core market. Based within the early Eighties, the corporate operates 71 amenities throughout South Africa and Botswana, catering to the privately insured market with a variety of medical companies.
Life Healthcare income surges 12.7%
Underneath Litlhakanyane’s management, Life Healthcare has seen sturdy monetary efficiency. Within the 2024 fiscal year, income grew by 12.7 p.c to R25.52 billion ($1.33 billion), with revenue after tax rising to R4.95 billion ($259 million), bolstered by a R2.8 billion ($146.5 million) acquire from the sale of Alliance Medical Group. These outcomes underscore the corporate’s profitable shift towards a extra targeted and resilient enterprise mannequin.
Litlhakanyane’s intensive expertise in healthcare and administration has performed a pivotal position in steering Life Healthcare by way of this transformation. A registered radiation and medical oncologist, he holds a number of levels, together with a Grasp’s in Enterprise Administration in Healthcare. Earlier than becoming a member of Life Healthcare, he held management roles at Bigen Africa Well being and Proper to Care, bringing a wealth of experience from each private and non-private sectors.
Because the sale awaits regulatory approvals, it additionally units the stage for Lantheus to strengthen its place within the radiopharmaceutical sector, leveraging LMI’s strong pipeline of imaging brokers. For Life Healthcare, the deal represents a crucial step in refining its operational focus whereas delivering lasting worth to shareholders.
