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Business News/ Companies / News/  Apollo Hospitals to buy Nova Speciality for Rs135-145 crore
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Apollo Hospitals to buy Nova Speciality for Rs135-145 crore

Apollo would acquire over 350 beds and 500 doctors as a result of the buyout of Nova Specialty Hospitals

The deal follows Apollo’s September purchase of Hyderabad-based Hetero Med Solutions Ltd’s pharmacy business for `146 crore. Premium
The deal follows Apollo’s September purchase of Hyderabad-based Hetero Med Solutions Ltd’s pharmacy business for `146 crore.

Chennai: Apollo Hospitals Enterprise Ltd on Tuesday said it had agreed to buy Nova Speciality Hospitals for 135-145 crore.

The Chennai-based company told BSE that the exact value of the transaction is subject to final deal closure. Nova aims to generate an annual business of 500 crore in five years from short hospital stays and day surgery centres.

Apollo Health and Lifestyle Ltd (AHLL) is already present in the secondary-care segment through its day surgery and cradle formats. This acquisition will enable AHLL to expand its footprint, given the immense potential and the need for quality healthcare delivery closer to the home," said Sangita Reddy, joint managing director of Apollo Hospitals.

Nova has 11 centres in eight cities, while AHLL has close to 100 operational centres in India and West Asia. This acquisition will also mark the entry of Apollo in Mumbai, Jaipur and Kanpur, Reddy added.

The deal follows Apollo’s September purchase of Hyderabad-based Hetero Med Solutions Ltd’s pharmacy business for 146 crore. Later in that month, the company announced a partnership with Sanofi India Ltd to provide integrated diabetes care through Apollo Sugar Clinics. As part of this deal, Sanofi India gained a 20% stake in Apollo Sugar Clinics.

According to Reddy, typically 60-70% of medical cases worldwide fall in the category of day surgeries, where the patient is discharged in less than 24 hours. Short-stay surgeries (usually for orthopaedic, urology or gynaecology-related diseases), which involve the patient staying at the hospital for a period of up to three days, form 20-30% of the cases.

Reddy said the acquisition would potentially free up beds and operating theatres in Apollo hospitals for more complex procedures, while surgeries requiring shorter stays could be handled at Nova.

Apollo would acquire over 350 beds and 500 doctors as a result of the buyout of Nova Specialty Hospitals. However, Nova’s IVI Fertility centres would be unaffected by the deal.

“It is a very interesting deal because everyone wants to see how Apollo manages the model of short stay (hospitals in India). Short stay as a model is not very old, let’s say there is no success story that we have," said Murali Nair, director of the life sciences practice for EY.

Nair said that while short-stay surgeries have “all the merits on paper", they have not quite worked out in India.

Rahul Chandran in Bengaluru contributed to this story.

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Published: 06 Jan 2015, 06:25 PM IST
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