Ranjan Pai’s Manipal Hospitals and billionaire B.R. Shetty-owned BRS Ventures Investment Ltd are front-runners in the race for Columbia Asia Hospitals in India, three people aware of the development said, requesting anonymity.
Seattle-based Columbia Pacific Management manages international healthcare businesses of Columbia Asia, a private healthcare company owned by a US-based investment fund, International Columbia USA Llc. Columbia Pacific, which had 17 hospitals in South-East Asia (12 in Malaysia, three in Indonesia and two hospitals and a clinic in Vietnam), now only operates 11 hospitals in India.
“The valuation of Columbia’s India hospitals is expected to be in the range of ₹1,800-2,000 crore; however, more details are likely to emerge after binding bids are submitted," said the first person cited above, adding the transaction is likely to close by March 2020.
The sale of its India hospitals follows the sale, in September, of Columbia Pacific’s South-East Asian operations to Malaysian conglomerate Hong Leong Group and TPG Capital, for an estimated $1.2 billion.
The person added that previously, Columbia Asia wanted to sell its India and South-East Asian hospitals in a combined deal, but it did not attract enough interest, and hence it decided to run separate sale processes for them.
Besides Manipal and BRS, private equity (PE) firm General Atlantic-backed Krishna Institute of Medical Sciences (KIMS Hospitals) and Radiant Life Care Pvt. Ltd, backed by PE firm KKR and Co. have also shown interest in the asset, the second person said.
“The process of due diligence is going on and binding bids are expected to be submitted by the end of this week. Morgan Stanley is acting as the exclusive financial advisor for the deal," he added.
While e-mails to Radiant Life Care and KIMS Hospitals remained unanswered, Morgan Stanley and BRS declined to comment. Columbia Asia declined to comment. Ranjan Pai, promoter of Manipal Education and Medical Group did not respond to text messages.
TPG and Temasek-backed Manipal Hospitals has been aggressively scouting for consolidation opportunities. In 2018, it was involved in a long battle to buy Fortis Healthcare, which was later won by Malaysia’s IHH Healthcare Bhd.
Later, it also spent considerable time trying to buy Dr Naresh Trehan’s Medanta hospitals. The deal however too fell through over a valuation mismatch, according to an 18 August Mint report.
The other contender, B.R. Shetty is a UAE-based India-born billionaire and the founder and non-executive chairman of Abu Dhabi-based NMC Healthcare, one of the largest private healthcare providers in the UAE. Shetty’s investment arm BRS Ventures has businesses across healthcare, financial services, pharmaceuticals, education, hospitality and environment sectors. Shetty told Businessworld magazine in March 2018 that he planned to invest $600-700 million towards expanding his healthcare business to India.