As part of this transaction, IHH will use Rs 265 crore to fund the hospital chain's capex requirements and optimise its current cost of borrowing.
IHH Healthcare Berhad, a Malaysian healthcare provider, has signed a definitive agreement to acquire a 73.4 percent stake in Hyderabad-based GE Medical Associates Private that runs Global Hospitals, for Rs 1,284 crore.
According to a release issued by IHH, pending necessary approvals and satisfaction of certain conditions, the deal is expected to close within 3 months. As part of this transaction, IHH will use Rs 265 crore to fund the hospital chain's capex requirements and optimise its current cost of borrowing.
Founded in 1999, Global Hospitals operates a chain of five hospitals -- supported by three feeder centres -- with approximately 1,100 operational beds in Hyderabad, Bangalore, Chennai and Mumbai.
The number of operational beds is expected to go up to approximately 1,900 within the next 5 years, the release said. Dr Tan See Leng, MD and CEO of IHH, said the acquisition will be a game-changer for IHH in India.
"Together with our existing hospitals, the acquisition of Global Hospitals catapults us towards becoming one of the leading hospital groups in India. India has tremendous growth potential with its rapidly increasing demand for quality private healthcare," Leng said.
IHH's India portfolio comprises approximately 1,800 beds with potential to reach up to 4,000 in the next 5 years, he said.
Dr K Ravindranath, founder and Chairman of Global Hospitals, said that with its expanded presence in India, IHH aims to gain further business synergies, cost savings and operating leverage through centralised procurement, optimised backroom functions, common branding and marketing strategy, sharing of doctors and better utilisation of facilities.
Tan Sri Dato Dr Abu Bakar Bin Suleiman, IHH Chairman, said the acquisition of Global Hospitals boosts IHH's beds globally to more than 8,000 across 45 hospitals in 10 countries.