Cloudnine in advanced talks to acquire Apollo Cradle in Rs 1,500 crore deal: Report

Apollo cradle

Cloudnine Hospitals, one of India’s leading maternity and paediatric care chains, is in advanced talks to acquire Apollo Cradle and Children’s Hospital (ACCHL) in a deal valued at around Rs 1,500 crore, according to a report by the Economic Times.

MC had first reported in September that Temasek-backed Cloudnine Hospitals is in the race for Apollo Cradle

Read: Race for Apollo Cradle & Children’s Hospital: Strategic players, PE firms evince early interest

ET, quoting people familiar with the development, reported that Cloudnine has signed an exclusivity agreement and begun due diligence on Apollo Cradle about two weeks ago. Homegrown private equity firm Kedaara Capital and TPG Growth-backed Asia Healthcare Holdings (AHH) were also in the race for the acquisition.

Apollo Cradle, a unit of Apollo Specialty Hospitals, operates a network of maternity and infant care centres across India, with around 363 beds across 13 hospitals in cities such as Bengaluru, Chennai, Delhi-NCR, Gurugram, Hyderabad, Amritsar and Uttar Pradesh. The company reported a Rs 40 lakh net loss in the last fiscal year, according to its annual report.

In June, Apollo Hospitals Enterprises Ltd (AHEL) had appointed Allegro Capital Advisors to scout for potential buyers for Apollo Cradle.

Founded in 2006 by neonatologist R Kishore Kumar along with Rohit MA, M Ramachandra, and Vidya Kumar, Bengaluru-based Cloudnine currently operates 40 centres across major Indian cities. The hospital chain, run by Kids Clinic India, added seven new centres in FY25 and plans to add another six to seven hospitals this fiscal year.

If the Apollo Cradle acquisition goes through, it will make Cloudnine the largest integrated maternity and paediatric care network in India, significantly expanding its geographic presence and market leadership, the ET report said.

“Apollo Hospitals is deeply committed to the mother and child category, which remains a core element of our portfolio. We are exploring avenues to expand this category, ensuring we serve more women and children with the most advanced and compassionate healthcare available,” a spokesperson for Apollo Hospitals told ET.

Private equity firms True North (formerly India Value Fund Advisors), TPG NewQuest, and Temasek together hold around 77% stake in Cloudnine, while the promoter group owns about 10%, with the remainder held through employee stock options.

Cloudnine reported a 25% year-on-year revenue growth in FY25, reaching Rs 1,486 crore, aided by its expanding hospital network and new centres. However, operating margins dipped slightly to 13% from 14.7% in FY24, mainly due to initial losses from recently launched facilities, according to Icra.