The acquisition-hungry Infratil has placed a A$700 million ($712m) bid for Australian radiology chain Qscan.
"The discussions are ongoing and incomplete and may not result in a transaction occurring," the company said in a statement to the NZX.
Infratil has placed a higher bid than other contenders, including ASX-listed Ramsay Health, according to the AFR.
Infratil raised $300 million in June 2020 to position itself to pursue its growth agenda and take advantage of any other investment opportunities that may arise.
"The proceeds of the equity raise were initially applied to reduce drawn bank facilities," the company said.
"Those existing bank facilities could now be applied to fund the Qscan acquisition if it occurs, so no additional funding would be required."
Qscan, currently owned by Quadrant Private Equity, operates around 70 clinics. Most of its operations are in NSW and Queensland, with a number in regional locations that are said to be struggling to hire skilled staff. It employs around 730, including around 100 radiologists.
A second report, in The Australian, says prospective buyers are being told that the company generates about A$50m of annual earnings before interest, tax, depreciation and amortisation, which could increase to A$80m and then A$90m in the next two years.
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Qscan could appeal to a buyer keen to roll up other diagnostic imaging providers, such as the listed groups Capitol Health and Integral Diagnostics, to create a far larger business, according to The Australian's Dataroom.
Radiology providers used to sell for between eight and 10 times earnings, but expectations are now between 10 and 12 times, it says - or around A$700m, based on forward earnings. That is, that apparent amount of Infratil's bid.
Quadrant invested in Qscan in June 2017, along with North Coast Radiology in a A$200m that, at the time, involved 33 clinics with 40 radiologists.
Bidding is said to have closed on Thursday.
If it does succeed, it will be second time lucky for Infratil to break into the healthcare sector.
The company is said to have narrowly missed out when Australia's Healthscope offloaded its New Zealand pathology assets in August - which were scooped up by the NZ Super Fund and the Ontario Teachers Pension Plan Board in a $550m deal.
Shares in Infratil last traded at $5.49, having gained 12 per cent over the last 12 months.