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Key Points
- Life Healthcare sells its interest in Life Molecular Imaging to Lantheus Holdings for R6.48 billion ($350 million), marking a strategic shift.
- The deal includes potential milestone payments up to $400 million based on LMI’s future sales performance, extending through 2034.
- Life Healthcare expects a net return of R3.7 billion ($200 million), with proceeds to be distributed to shareholders within 12 months.
Life Healthcare Group Holdings Limited, a South African private healthcare provider led by medical doctor and business executive Victor Litlhakanyane, has agreed to sell its indirect interest in Life Molecular Imaging (LMI) to U.S.-based Lantheus Holdings Inc. for R6.48 billion ($350 million). The transaction, announced on Jan. 12, 2025, marks a strategic shift for Life Healthcare, which has invested significantly in LMI since acquiring it in 2018.
Under the agreement, Life Healthcare will receive an upfront payment of $350 million on a cash-free, debt-free basis, subject to working capital adjustments. The deal also includes the possibility of earning up to $400 million in milestone-based payments tied to LMI’s future sales performance, extending through 2034. This structure allows Life Healthcare to retain a stake in LMI's ongoing success.
After accounting for transaction costs, management incentives, and profit-sharing obligations, Life Healthcare expects a net return of approximately R3.7 billion ($200 million). The proceeds are earmarked for distribution to shareholders within 12 months of the deal's completion, pending board approval.
Life Healthcare refocuses on core operations
This move aligns with Life Healthcare’s broader strategy to focus on its core operations in Southern Africa. Following its sale of Alliance Medical Group in 2024, the divestment of LMI represents another step toward streamlining operations and enhancing financial stability. Despite exiting LMI, Life Healthcare will maintain commercial ties through a sub-license agreement with Lantheus, potentially unlocking further economic benefits.
Life Healthcare acknowledged that while it has invested $66 million into LMI’s development, it is not best suited to oversee the radiopharmaceutical company’s long-term growth. Lantheus, a global leader in nuclear medicine, is seen as better equipped to scale LMI’s operations and expand its portfolio, including its flagship Alzheimer’s diagnostic tool, NeuraCeq, and other imaging agents in late-stage trials.
For shareholders, the sale offers immediate financial returns while eliminating the capital expenditure and risks associated with LMI’s future development. This decision also reflects Life Healthcare’s focus on delivering value-based care within its core market. Founded in the early 1980s, the company operates 71 facilities across South Africa and Botswana, catering to the privately insured market with a wide range of medical services.
Life Healthcare revenue surges 12.7%
Under Litlhakanyane’s leadership, Life Healthcare has seen strong financial performance. In the 2024 fiscal year, revenue grew by 12.7 percent to R25.52 billion ($1.33 billion), with profit after tax rising to R4.95 billion ($259 million), bolstered by a R2.8 billion ($146.5 million) gain from the sale of Alliance Medical Group. These results underscore the company’s successful shift toward a more focused and resilient business model.
Litlhakanyane’s extensive experience in healthcare and management has played a pivotal role in steering Life Healthcare through this transformation. A registered radiation and clinical oncologist, he holds multiple degrees, including a Master’s in Business Administration in Healthcare. Before joining Life Healthcare, he held leadership roles at Bigen Africa Health and Right to Care, bringing a wealth of expertise from both public and private sectors.
As the sale awaits regulatory approvals, it also sets the stage for Lantheus to strengthen its position in the radiopharmaceutical sector, leveraging LMI’s robust pipeline of imaging agents. For Life Healthcare, the deal represents a critical step in refining its operational focus while delivering lasting value to shareholders.
