Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / Blackstone, TPG, Temasek plan to acquire KIMS hospital chain
BackBack

Blackstone, TPG, Temasek plan to acquire KIMS hospital chain

Ascent Capital and OrbiMed Advisors will sell their combined 40% stake, while the promoters will dilute an additional 15-20% for a deal worth $300 million

KIMS runs a 125-bed hospital in Cochin and a 450-bed hospital in Thiruvananthapuram. It also runs multi-specialty hospitals in Bahrain, Oman, Dubai, Saudi Arabia and Qatar.Premium
KIMS runs a 125-bed hospital in Cochin and a 450-bed hospital in Thiruvananthapuram. It also runs multi-specialty hospitals in Bahrain, Oman, Dubai, Saudi Arabia and Qatar.

Mumbai: Kerala Institute of Medical Sciences (KIMS), the hospital chain with a presence in India and West Asia, has been approached by 8-10 large buyout funds that want to acquire a majority stake in it.

Ascent Capital Pvt. Ltd and OrbiMed Advisors LLC, private equity (PE) investors in KIMS, will sell their combined 40% stake, while the promoters will dilute an additional 15-20% for a deal worth $300 million ( 2,050 crore), according to two people close to the development.

Blackstone, TPG Capital, Temasek Holdings Pte Ltd and Baring Private Equity Asia are among firms interested in KIMS, one of the two people cited above said, requesting anonymity. A Japanese PE fund has also shown interest, he added.

Investment bank Rothschild is advising the exiting PE investors in KIMS.

“The investors have shortlisted about 8-10 PE funds and discussions with the interested parties will start in a month’s time," said the second person, also requesting anonymity.

The names of other PE funds could not be ascertained. India Value Fund Advisors (IVFA) is also interested and it could bid jointly with other hospital chains, said the second person close to the development.

KIMS runs a 125-bed hospital in Cochin and a 450-bed hospital in Thiruvananthapuram. It also runs multi-specialty hospitals in Bahrain, Oman, Dubai, Saudi Arabia and Qatar.

OrbiMed and Ascent Capital had acquired stakes in KIMS in early 2012.

Spokespersons for TPG Capital, Temasek and Baring PE Asia declined to comment. Mails sent to Vishal Nevatia, managing partner at IVFA, Dr. M.I. Sahadulla, chairman and managing director of KIMS and a Blackstone spokesperson did not elicit any response.

A consortium of TPG Capital and Temasek was one among the two final contenders for acquiring Hyderabad-based CARE Hospitals. The hospital chain was finally sold to Dubai-based private equity investor Abraaj Group in January. Through this deal, PE investor Advent International exited CARE Hospital by selling its 72% stake. Baring Private Equity Asia was also one of the bidders for CARE Hospitals.

In February last year, TPG Capital purchased a significant minority stake in Manipal Health Enterprises Pvt. Ltd for 900 crore.

“Hospital and diagnostic assets have seen very healthy interest among financial sponsors due to the strong sustainable growth attributes of these assets and the quality of brands or management team. That’s why some of the assets like CARE Hospitals have commanded multiples in high teens and even IPO (Inital public offer) markets have valued them attractively," said Pramod Kumar, managing director of Barclays Capital India.

There is high investment potential in the Indian hospital sector because of a huge demand-supply gap.

The healthcare delivery system in India will need to add 3.6 million beds, 3 million doctors and 6 million nurses over the next 20 years, according to a January 2015 PricewaterhouseCoopers’s report. This will require an investment of around $245 billion, it said.

India has only 1.3 hospital beds per 1,000 people, significantly lower than the World Health Organization (WHO) guideline of 3.5 beds, the report said. India’s bed density is also the lowest among BRIC (Brazil, Russia, India and China) nations. In the last couple of years, hospital chains in India have seen strong interest from private equity funds.

IDFC Alternatives Ltd, the asset management arm of Infrastructure Development Finance Co. Ltd, is all set to sell Sahyadri Hospitals Ltd, the largest chain of multi-specialty hospitals in Maharashtra, and has hired Chennai-based Veda Corporate Advisors Pvt. Ltd to find buyers, Mint reported last month.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 02 Mar 2016, 01:51 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie