MUMBAI (TIP): Temasek Holding is set to acquire majority shares in Hyderabad-based Care Hospitals, the country’s fifth largest private healthcare network, for around Rs 1,800 crore in what is possibly the largest M&A deal in domestic healthcare delivery sector, people directly familiar with the matter said.
Singapore investor Temasek is in the final stages of buying the 73%stake held by US-based private equity Advent International, which is due for announcement in the next fortnight. The transaction values Quality Care India, which runs 17 hospitals with 2,400 beds across nine locations under the Care brand, at over Rs 2,250 crore.
In October, TOI had reported that Temasek and Middle East fund Abraaj Capital were the final bidders vying for the acquisition.
“Temasek’s offer moved ahead of Abraaj and is poised to win but for unforeseen last-minute hurdles,” one of the sources cited earlier in the report said. A team of medical professionals led by Dr B Soma Raju will continue to retain minority shares. Investment bank Moelis & Co is advising Advent on the sale process. Temasek was partnering with TPG Growth for a joint bid initially, but has decided to strike the deal on its own now. Temasek’s offer topped the rival bid from Abraaj Capital. Advent is expected to net slightly over two-times return from its investment in Care. Advent, which initially invested $110 million for a 60% stake, pumped in more money to help Care’s expansion plans and increased its shareholding in the company. The hospital chain is poised to add 600 more beds in the near future through greenfield and brownfield expansion, taking the overall count to 3,000 beds.
Advent International declined to comment, when contacted. Temasek too declined to comment on speculation. “The healthcare services witnessed tremendous investments in regional corporate chains over the last 3-4 years. The industry is still heavily fragmented and we will continue to see global investors driving consolidation,” said Sunil Jain, MD, Sprout Capital.