Singapore/Dubai: Billionaire Indian brothers Malvinder and Shivinder Singh’s Fortis Healthcare International has pulled out of talks to buy a controlling stake in Turkish hospital group Acibadem, a source with direct knowledge of the talks told the news agency.
Fortis backed out due to valuation concerns and political unrest in the Middle East, the source said on Wednesday, declining to be identified as the matter was not public yet.
The stake is being sold by Almond Holding, owned by Dubai-based private equity firm Abraaj Capital and Turkish family Aydinlar. Abraaj has a 46% stake in Almond Holding, which controls 92% of Acibadem. Bank of America-Merrill Lynch and Goldman Sachs have been advising Abraaj.
Acibadem, which has a market value of $1.2 billion, said last month it was in talks with investors including Fortis Healthcare. “We cannot comment on specific interests or approaches, but given significant interest in this unique asset, only the best offers from credible parties with financing in place are being considered in the process,” an Abraaj source told the news agency.
Another banking source said the Acibadem stake had attracted interest from several private equity firms including Blackstone, KKR, TPG Capital and Advent International.
With financing markets frozen for large private equity-backed deals, buyout firms could struggle to secure funding.
Abraaj is the largest Middle East private equity firm, with assets under management of $6.2 billion. It bought the Acibadem stake in 2007 and 2008 for around $610 million through its $2 billion infrastructure and growth capital fund.
The Singhs also control Mumbai-listed hospital chain Fortis Healthcare, which on Monday said it would buy out Fortis Healthcare International.
Malvinder Singh declined to comment on the Turkish sale.
Turkey has been attracting international investors’ interest, with one of the highest economic growth rates globally. Healthcare and private hospitals are popular choices among private equity houses.
United States (US) private equity giant Carlyle took a 40% stake in Medical Park in 2009 for an undisclosed amount alongside founders Muharrem Usta and Haydar Sancak. In August, sources told Reuters that Medical Park owners, led by Carlyle were considering a sale or initial public offering of the business.
Political unrest in the Gulf Arab world has slowed merger and acquisition activity with potential deals getting delayed, mainly in places like Bahrain and Egypt, bankers say.
Acibadem shares were up 1.5% at 03:15 pm.