Max Healthcare Institute Ltd. has signed a Share Purchase Agreement (SPA) with Jaypee Infratech Ltd. and Lakshdeep Group to acquire a controlling 63.65 percent stake in Jaypee Healthcare Limited (JHL) for an aggregate consideration of approximately Rs 398 crore. The deal is part of Max Healthcare's strategy to expand its footprint in the National Capital Region (NCR), it said in a stock exchange filing late on September 26, 2024.
Jaypee Healthcare, which owns and operates three hospitals in Uttar Pradesh, including the 500-bed Jaypee Hospital in Noida and the 200-bed Jaypee Hospital in Bulandshahr, is currently undergoing the Corporate Insolvency Resolution Process (CIRP).
Max Healthcare's acquisition of Jaypee Healthcare is based on an enterprise value of Rs 1,660 crore, which was announced in a stock exchange filing on September 13, 2024. The company will also arrange debt for the repayment of admitted claims to JHL's financial creditors.
Under the agreement, Max Healthcare will acquire 27.21 crore equity shares, representing 63.65 percent of JHL's total share capital. In addition, a Shareholders Agreement (SHA) has been executed, giving Jaypee Infratech the option to sell and Max Healthcare the option to acquire the remaining 36.35 percent of Jaypee Healthcare’s equity.
The acquisition awaits the fulfilment of certain conditions, including the release of the pledged shares by Jaypee Healthcare’s lenders. The deal follows the September 12, 2024, approval from the National Company Law Appellate Tribunal (NCLAT), Delhi, of a settlement agreement between Lakshdeep Group and Jaypee Healthcare’s Committee of Creditors.
Max Healthcare Chairman and Managing Director Abhay Soi had said in the previous filing: “The addition of JHL to our network is an important milestone in building a formidable presence in the NCR, a region that is not only home to 46 million people but also plays a pivotal role in shaping the Indian economy as an economic hub.”.
For the financial year 2023-24, Jaypee Healthcare reported revenue of Rs 421 crore and EBITDA of Rs 70 crore. The deal is expected to close within 30 days, giving Max Healthcare operational control over Jaypee Healthcare’s hospitals.
Max Healthcare share price fell on Friday, September 27, trading at Rs 983.65, down 1.4 percent from the previous close. The stock has risen 71 percent in the last one year, taking the company’s market capitalisation to nearly 96,000 crore. It has beaten benchmark NSE Nifty 50, which has gained 33 percent in one year.
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