Temasek's Sheares Healthcare targets 90% holding in Medica Synergie hospital chain

In December 2021, Sheares had acquired a majority position in Medica Synergie by purchasing the stake held by private equity firm Quadria Capital (representative image)

Singapore investment giant Temasek's healthcare platform Sheares Healthcare has entered the last leg of negotiation to raise its stake to 90 percent in leading Kolkata-based hospital chain Medica Synergie by providing an exit to the chief founder, multiple sources told Moneycontrol.

In December 2021, Sheares had acquired a majority position in Medica Synergie by purchasing the stake held by private equity firm Quadria Capital.

"Sheares is looking to shore up its current stake from around 75 percent to around 90 percent in the firm via a combination of primary and secondary issue of shares," said one of the persons above.

A second person told Moneycontrol that as part of the proposed transaction, Sheares has held talks to buy out the minority stake held by Medica Synergie’s Chairman and founder Dr Alok Roy and related entities.

According to a third person familiar with ongoing discussions, "Sheares is in consolidation mode. It is an active investor, has an operational bent of mind and gets involved in day-to-day operations."

If the deal fructifies, Sheares is likely to appoint a new chairman of Medica Synergie from its India team, this third person added. He further added that the remaining shareholders of Medica Synergie, which include an early investor along with doctors and associates, are not in exit mode.

All the three persons above spoke to Moneycontrol on the condition of anonymity.

In response to a detailed email query from Moneycontrol, Sheares Healthcare responded saying, " It is not our practice to comment on media reports with regards to market transactions."

An email query to Medica Hospitals was left unanswered and when contacted, Dr Alok Roy declined to comment.

Sheares holds an 18 percent stake in Manipal Hospitals and also has exposure to Global Health, the listed operator of Medanta Hospitals.

The Medica journey

Medica Hospitals, a leading healthcare chain in eastern India, has built and managed a number of multispecialty and superspecialty healthcare facilities across the region. According to its website, it has a total of 11 hospitals.

Beginning its journey with Medica North Bengal Clinic (MNBC) in Siliguri in 2008, the group launched its flagship Hospital – Medica Superspecialty Hospital (more than 400-plus beds) in Kolkata in 2010. Soon after Medica Cancer Hospital in Rangapani, Siliguri, was set up in North Bengal and the trust hospital R.C. Agarwal Memorial run by Medica in Tinsukia brought quality multispecialty healthcare to Assam.

Medica tied-up with the Jain Samaj for Bhagwan Mahavir Medica Superspecialty Hospital, a new venture in Ranchi. Tata Steel Medica Hospital in Kalinganagar, Odisha, began operations in 2015. In 2017 Medica stepped into Bihar with a specialized heart care unit, Medica Heart Institute, Patna.

The Sheares strategy

Sheares Healthcare Group invests in and provides healthcare delivery services in Asia, with a focus on China, India, Vietnam, Malaysia, Indonesia and the Philippines, along with the United States.

The platform looks to build its portfolio of healthcare delivery assets by investing in healthcare companies with strong management teams and proven track records. It aims to develop new healthcare delivery models and processes in the right setting by leveraging innovative technologies and operators.

A landmark deal

On December 27, 2022, Moneycontrol had reported that Temasek was eyeing a controlling stake in the Manipal Hospitals chain by buying a stake from the promoter family and other investors TPG and NIIF in a proposed transaction, which would value Manipal Hospitals between Rs 40,000 crore and Rs 42,000 crore.

Later on April 8, Moneycontrol reported that the deal had been signed between both the parties.

In his first interview to the media post the official announcement of the deal, Dr Ranjan Pai told Moneycontrol that Temasek’s entry valuation is reflective of the long-term potential of the healthcare services segment in India.

When asked about the possibility of a merger in the near future between Manipal Hospitals and Medica Synergie (with Sheares a common investor in both entities), Pai said, "No discussions regarding this have happened at this point in time."

Hospital M&A: In the pink of health and cheer

The Indian healthcare space has been buzzing with M&A activity in the last two years.

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.

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.