Temasek, Ranjan Pai-backed Manipal Hospitals to win race for Sahyadri Hospitals with near Rs 6,150-crore bid

As part of its first control private equity buyout in India in 2022, Canadian pension fund Ontario Teachers Pension Plan acquired a majority stake in Pune-based Sahyadri Hospitals Group from Everstone Group

Singapore investment major Temasek and billionaire Dr Ranjan Pai-led Manipal Hospitals is poised to win the hotly contested sale process of Canadian pension fund Ontario Teachers Pension Plan (OTPP)-owned Sahyadri Hospitals, multiple industry sources in the know told Moneycontrol.

"Post submission of binding bids, south focused and IPO-bound Manipal Hospitals has the highest offer amongst all suitors with an equity value of around Rs 6,150 crore and discussions have moved faster with them ," one of the persons above said.

Two other persons confirmed the above and one of them added that final, definitive documents between OTPP and Manipal Hospitals could be signed within the next few days, followed by an official announcement.

All the three persons spoke on the condition of anonymity.

On June 29, Moneycontrol had first reported that Manipal Hospitals was one of the front-runners to bag the deal along with Swedish private equity firm EQT.

AsterDM Quality Care India (jointly controlled by Blackstone and Aster promoters post-merger) and Malaysia's IHH were the other suitors who had reached the binding bid stage.

Email queries have been sent to OTPP, Manipal Hospitals, Temasek and Dr Ranjan Pai and an immediate comment couldn't be elicited from them. When contacted, Blackstone declined to comment. This article will be updated as soon as we hear from the other parties.

This is the fourth proposed acquisition by south-focused Manipal Hospitals since 2021, which will bolster its presence in Maharashtra i.e the western market. The Bengaluru-headquartered chain has grown inorganically via deals like Vikram Hospitals, Columbia Asia's Indian operations and Emami Group's AMRI Hospitals.

With Manipal Hospitals gearing up to acquire Sahyadri Hospitals (the asset has more than 1,200 beds across Pune, Ahmednagar (now Ahilyanagar) and Nasik with further expansion plans in the state), the current domestic leadership positions in the Indian hospital sector may be rejigged in terms of bed capacity, Ebidta and revenues.

Apollo Hospitals and Max Healthcare are the other two key players in the segment along with Aster DM Quality Care India.

Interestingly, private equity firm KKR, which backs Baby Memorial Hospital and cancer care hospital firm HCG, had also expressed interest earlier in the Sahyadri Hospitals transaction. On June 2, it announced a $600 million credit facility to the diversified Manipal Group, its largest India credit deal.

As part of its first control private equity buyout in India, on August 16, 2022, OTPP had announced an agreement to acquire a significant majority stake in Sahyadri Hospitals Group from the Everstone Group with reports pegging the valuation of the hospital chain at around Rs 2,500 crore.

On January 23, Moneycontrol reported that OTPP had engaged investment bank Jefferies for the proposed sale process. Alvarez & Marsal was roped in later as well.

As per the report, OTPP owns nearly 100 percent of the firm and since coming on board, has ramped up in several specialties like mother and childcare and oncology.

Sahyadri Hospitals was established in the year 1994 with Pune Institute of Neurology exclusively dedicated to Neurology and Neurosurgery.

Dr. Charudutt Apte (father of actress Radhika Apte), Sadanand Bapat and Nitin Desai are the founders and according to its website, the chain has 11 hospitals across Maharashtra, more than 50 lab collection centres, 2,000 plus clinicians and over 4,000 expert staff.