Companies
Blackstone breaks into Indian healthcare; bites into Kims Health, Care Hospitals
Summary
- Following the transaction, True North, which previously held a 61% stake in Kims, will divest its entire position. Blackstone pays $1 billion for twin purchases.
Mumbai: Private equity firm Blackstone Group Inc. has acquired controlling stakes in Care Hospitals and Kims Health in a $1 billion multi-layered deal. This is Blackstone’s first investment in the Indian healthcare services.
Blackstone has acquired around 75% stake in Care Hospitals from TPG’s healthcare platform Evercare Health Fund for around $700 million, a person with knowledge of the deal said, asking to remain anonymous. The balance stake is owned by TPG Rise.
Care Hospitals, in turn, has signed a definitive agreement to acquire a majority stake in True North-backed Kims Health. Together, Care and Kims Health will have over 4,000 beds, across 23 facilities in 11 cities.
Care Hospitals has invested around $400 million to acquire around 80% stake in Kims Health, the person cited above said. Of this, Blackstone has invested $300 million, while TPG has put in around $100 million. Kims Health founder Dr M. I. Sahadulla will retain the balance stake and continue to run Kims Health.
Blackstone’s overall investment will be $1 billion.
The total enterprise valuation of both deals is around $1.33 billion.
“We are pleased to make Blackstone’s first investment in India’s healthcare services sector and partner with TPG to create one of the largest healthcare platforms in India," Ganesh Mani, managing director at Blackstone Private Equity, said. “We are committed to being a long-term investor and business builder. We seek to grow the platform organically and through acquisitions. Life sciences is a key investment theme for Blackstone and we plan to bring in our global scale and operating expertise. We plan to invest in world-class physical and medical infrastructure, enhance the companies’ digital and technological capabilities, add higher end quaternary care specialties, and cultivate a clinician and employee culture focused organization," Mani added.
Blackstone had signed a definitive agreement for Care Hospitals in May, but the deal was delayed because of a legal challenge by Max Health Enterprises. The deal closed on Monday morning.
Kims Health was initially in talks with Manipal Health Enterprises, but a deal was finally struck with Care Hospitals.
“We believe there is significant potential in creating a market leading platform through both organic and partnership-driven consolidation efforts, which is evidenced in our proposed association with Kims Health," Ankur Thadani, partner at TPG Rise, said.
True North, which owned around 61% stake in Kims before this transaction, will sell its entire stake.
The combined platform will offer 30 clinical specialties, including cardiac sciences, oncology, neurosciences, renal sciences, orthopaedics, gastroenterology, and integrated organ transplant.
Barclays and Rothschild acted as financial advisers to TPG on the Care Hospitals transaction. ICICI Securities advised Kims Health and its shareholders. Blackstone was advised by o3 Capital on the Care Hospitals transaction.
Shardul Amarchand Mangaldas acted as legal advisors for TPG and Kims Health, Desai Dewanji advised True North, and Trilegal advised Blackstone.
