Sheares Healthcare India, which is backed by Singapore's Temasek, has sealed a deal to acquire a majority stake in billionaire Ranjan Pai-led Manipal Hospitals, multiple industry sources with knowledge of the matter told Moneycontrol. This is India's largest-ever private equity deal in the healthcare sector, they added.
On December 27, 2022, Moneycontrol had reported that Sheares, an existing investor, was eyeing a controlling stake in the hospital chain by buying stake from the promoter family and other investors TPG and NIIF.
"The deal has been signed and an official announcement is expected next week. The enterprise value of Manipal Hospitals is expected to be around Rs 40,000 crore to Rs 42,000 crore as part of the transaction," said one of the persons above.
A second person said that post the deal, Temasek-owned Sheares, which would buy 41 percent from the other parties for around Rs 16,000 crore, would own a combined stake of 59 percent.
A third person confirmed the above and added that an official announcement on the transaction is expected next week.
All three persons above spoke to Moneycontrol on the condition of anonymity. Temasek and Manipal Hospitals declined to comment.
Sheares, which manages a portfolio of healthcare delivery assets for investment major Temasek, is an existing shareholder in Manipal Hospitals and holds around 18 percent stake. Other than Temasek-led Sheares, the other external shareholders in Manipal Health Enterprises include US private equity firm TPG, which holds around 21 percent stake, and India’s sovereign wealth fund NIIF (National Infrastructure Investment Fund), which has an 8 percent stake.
Other than Manipal Hospitals, Sheares India is also an investor (majority stake) in the Kolkata-based hospital chain Medica Synergie. Separately, Temasek also holds around 16 percent stake in Global Health, the operator of Medanta Hospitals, which is listed on the domestic bourses.
R Venkatesh is the India CEO of Sheares. Earlier, he was the Managing Director, India at Temasek Holdings for over 12 years
Manipal, Temasek-led Sheares & TPG: The M&A Action
In December 2021, Temasek platform Sheares Healthcare acquired a majority stake in Medica Synergie, a multi-speciality hospital. Since then, it has been gradually exploring other domestic inorganic options.
On September 3, 2022, Moneycontrol reported that peers Manipal Health Enterprises and Max Healthcare were likely to express interest if a controlling stake was up for grabs in private equity firm True north backed KIMSHEALTH.
On February 7, 2023, Moneycontrol also reported that the Ranjan Pai-led hospital chain had offered a fresh, revised bid for Emami Group-owned AMRI Hospitals and entered into settlement talks with the Kolkata- based diversified conglomerate.
In late 2022, Manipal Health Enterprises moved the Delhi High Court, seeking to bar the Emami Group from selling or transferring its majority stake in AMRI Hospitals to a third party or altering the management. The move came on the back of protracted negotiations between both parties over a year which failed to fructify into a deal after differences over terms and conditions, including valuations.
The Manipal Group, which has nearly 8,000 beds across 28 hospitals, has been on a consolidation drive. In November 2020, it acquired the Indian assets of Columbia Asia Hospitals for around Rs 2,100 crore, and later in June 2021, it purchased Bengaluru-based Vikram Hospitals from Multiple Private Equity for around Rs 350 crore.
TPG Capital picked up a significant minority stake in the Ranjan Pai-led hospital chain for Rs 900 crore in February 2015 and has been looking to clock returns on its seven-year-old bet. As part of its India portfolio, TPG also backs Care Hospitals, Motherhood hospitals, and infertility chain Nova IVF.
Back in January 2022, Moneycontrol was the first to report that nearly three years after taking over the management of hospitals and clinics previously managed by a fund of failed private equity firm Abraaj, TPG-backed Evercare was looking to exit Hyderabad-based Care Hospitals.
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