AT FIRST glance, hospitals seem an unattractive business. They are heavily regulated and often run by governments or charities. Doctors wield immense power. Patients have high and rising expectations. Rapid advances in medical technology drive costs relentlessly upwards even as governments try harder to restrain spending on health.
And yet, consider the flurry of deals of late. On July 19th TPG and the Carlyle Group, two American private-equity firms, won a takeover battle for Healthscope, an Australian hospital chain, with a bid of $1.7 billion. In doing so, they edged out a bid by Kohlberg Kravis Roberts (KKR), another big American private-equity firm. Healthscope is Australia’s second-biggest private hospital firm, but it also has operations in New Zealand and south-east Asia.