MC EXCLUSIVE EQT, Blackstone backed Quality Care, Manipal Hospitals, IHH submit binding bids for OTPP owned Sahyadri Hospitals

EQT, Blackstone backed Quality Care, Manipal Hospitals & IHH submit binding bids for OTPP owned Sahyadri Hospitals

Swedish PE major EQT, Blackstone and TPG-backed platform Quality Care India, Temasek, and Dr Ranjan Pai-led Manipal Hospitals and Malaysia's IHH have submitted binding bids for the proposed acquisition of Canada's Ontario Teachers-owned Sahyadri Hospitals, three persons in the know told Moneycontrol on the condition of anonymity.

On June 3, Moneycontrol had first reported that the four suitors above were likely to submit final bids by June 23, the deadline. The report had added that the bids were expected in the region of Rs 5,500 crore to Rs 6,000 crore.

The Pune-based asset, the largest private multi-speciality hospital chain in Maharashtra, is controlled by Canadian pension fund Ontario Teachers' Pension Plan ( OTPP), which is betting big on India to achieve its target of hitting $300 billion in net assets by 2030.

Email queries have been sent, but an immediate comment could not be elicited from OTPP, EQT, IHH, Manipal Hospitals, Dr Ranjan Pai and TPG. This article will be updated as soon as we hear from these parties. Blackstone declined to comment.

Rival 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.

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 January 23 report by Moneycontrol, OTPP owns nearly 100 per cent of the firm and since coming on board, has ramped up in several specialities like mother and childcare and oncology.

"The asset has more than 1,200 beds across Pune, Ahmednagar (now Ahilyanagar) and Nasik with further expansion plans in the state and will be attractive to those players not present in Maharashtra or western India," the report had added.

Later, on March 10, Moneycontrol was the first to report that Singapore investment giant Temasek and billionaire Dr Ranjai Pai led IPO-bound Manipal Hospitals, IHH Healthcare, Swedish private equity firm EQT & rival KKR were among early-stage suitors in the fray for the largest private multi-speciality hospital chain in Maharashtra.

Blackstone and Warburg Pincus were also named as contenders in a subsequent report by Moneycontrol on April 7.

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.

Sahyadri Hospitals was established in the year 1994 with the 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.

Swedish private equity major EQT, which backs Hyderabad based AIG Hospitals, has invested more than $6 billion in India over the last 21 months and in December, Jean Salata, Chairperson EQT Asia and Head of Private Capital Asia said that the buyout market is "underpenetrated" in India and EQT seeks to replicate the success achieved by the firm earlier in the IT services segment with similar, control deals in the healthcare and financial services segment.

In November, Blackstone and TPG-backed Quality Care announced the signing of definitive agreements for a proposed merger with Dr Azad Moopen-backed listed player Aster DM Healthcare in a big-bang $5bn transaction.

"Aster DM Quality Care Limited will have a portfolio of four leading brands: Aster DM, CARE Hospitals, KIMSHEALTH and Evercare. The combined entity will have a network of 38 hospitals and 10,150+ beds spread across 27 cities, making it one of the top 3 hospital chains in India, " the official announcement said.

The transaction is subject to shareholder & regulatory approvals, and the merger transaction is expected to close by Q3 FY26, the announcement added.

In an interview to Moneycontrol post the mega merger, Ganesh Mani, Senior MD, Blackstone India said the investment giant will evaluate inorganic opportunities pan-India and plans to cross 13,000 beds in a little more than two years. He added that Blackstone is committed to becoming a leading player in the Indian healthcare market.

South-focused and Temasek-backed Manipal Hospitals, an IPO- bound firm, has grown inorganically via deals like Vikram Hospitals and Columbia Asia's Indian operations and has expressed interest earlier in the sale process of hospital chains like KIMS Healthcare (which was eventually acquired by Blackstone).

Manipal Hospitals and Blackstone-backed Aster DM Quality Care may rejig the current domestic leadership positions in terms of bed capacity, EBITDA and revenues if either of them bags the Sahyadri deal.

In September, Prem Kumar Nair, Group CEO of IHH Healthcare, said the firm intends to stay and grow in India with Fortis and Gleaneagles, the "twin growth engines."

"If we do some acquisitions along the way, we will add another 1,000 or 2,000, and that's why I said between the two ( Fortis + Gleneagles), we'll probably have about 10,000 beds in a few years," Nair said in an interview to CNBC-TV18 in September.

Nair added, "For a strategic acquisition or a big acquisition to take place, we have several criteria. First, it must be in a market or in an area. Of course, there must be significant demand, and we look at the competitive situation. We want to get facilities that have the highest clinical quality. Secondly, we put a lot of emphasis on patient outcomes. Thirdly, of course, it must be accretive within 2-3 years."