Aster’s India unit draws suitors valuing business at $1.5 billion

Aster shares have soared about 40% this year, valuing the Mumbai-listed company at about $1.9 billion.

Private equity firm BPEA EQT and Ontario Teachers’ Pension Plan Board are among firms considering a deal to acquire Aster DM Healthcare Ltd. assets including its India business, according to people familiar with the matter.

BPEA EQT and OTPP have expressed preliminary interest in the hospital operator’s business in the South Asian nation, the people said. A deal would help the investors tap into the growth potential of health-care services in the country, the people said, asking not to be identified because the matter is private. Others interested in potential bids for Aster’s India business include Blackstone Inc. and KKR & Co., the people said.

Prospective acquirers could decide to team up, and deal considerations could also lead to other transactions, including a full takeover of the company, the people said.

Separately, Dubai-based private equity firm Fajr Capital is part of a consortium seeking to buy a majority stake in Aster’s Gulf business, Bloomberg News reported in March.

A deal for all of Aster could value it at more than $2.5 billion, the people said. Its Gulf assets may fetch about $1 billion, while the Indian business could be worth around $1.5 billion in a transaction, they added.

Aster shares have soared about 40% this year, valuing the Mumbai-listed company at about $1.9 billion.

Blackstone may consider an acquisition of Aster’s India business via Quality Care India Ltd., one of the people said. The private equity firm received approval last month from the Competition Commission of India to buy a 72% stake in the chain, known as Care Hospitals.

Talks are ongoing and the bidders could still decide against pursuing a deal, the people said. Other bidders could still emerge, they added. Representatives for Aster, Blackstone, BPEA EQT and KKR declined to comment, while a spokesperson for OTPP didn’t immediately respond to requests for comment.

Founded in 1987 from a single clinic in Dubai, Aster operates 33 hospitals as well as hundreds of clinics and pharmacies across India and the Gulf region. The firm has been working with advisers to hive off its business in the Gulf, Chairman Azad Moopen told Bloomberg News in 2021.

The company has been expanding in India and plans to add hundreds of hospital beds there through 2026, according to its latest investor presentation. More than half of Aster’s hospitals are in the country, but that market accounted for about a quarter of its revenue in quarter ending June 30.

EQT AB last year acquired Hong Kong-based BPEA in the biggest takeover in the private equity sector. The deal combined the two firms’ Asia private equity teams to create BPEA EQT.