The Raffles Medical Group of Singapore said Monday it has agreed to buy Island Hospital Sdn Bhd, a 240-bed private hospital in Penang, Malaysia, for RM110 million.

The acquisition allows publicly-listed Raffles Medical, which is positioning itself as a regional healthcare provider and aiming for the lucrative expatriate patients market, to further broaden its geographical presence.

Affluent Penang state is the center of Malaysia's information technology industry and hosts a sizeable number of foreign executives and their families.

Island Hospital was established in 1996 and caters to patients from northern Malaysia, Thailand and Indonesia's Sumatra state.

"The acquisition is a step towards transforming Raffles Medical into a regional powerhouse in healthcare services," Raffles Medical executive chairman Loo Choon Yong said.

"As we expand, we want to bring the Raffles brand of quality healthcare to the region and beyond," he added.

The acquisition, expected to be completed in early 2005, will be financed through internally generated cash and borrowings. The company said it had no plans to make a cash call to finance this acquisition.

Overseas expansion

Loo said Raffles Medical would continue to look for overseas expansion opportunities.

"We will expand, through Island Hospital, to the rest of Malaysia," Loo said, adding that the company is also eyeing acquisition opportunities in Indonesia, China and the Middle East.

Raffles Medical currently operates a flagship hospital in Singapore and a network of medical centres and clinics in Singapore and Hong Kong.

It also has representative offices in Jakarta, Bangladesh, Sri Lanka, Dubai, Abu Dhabi, Bahrain and Korea.

In August, Raffles Hospital cut charges for key services, including heart bypass surgery, to fend off mounting competition from Thailand and Malaysia for Southeast Asia's lucrative foreign patient market.