PE firm Actis looking to exit Sterling Hospitals

Preeti Mehra New Delhi | Updated on November 23, 2017

Fortis, Apollo Hospitals in the race to pick up stake

Private equity firm Actis Capital LLP is looking to divest its majority stake in Rs 150-crore Gujarat-focussed hospital chain, Sterling Hospitals. According to industry sources, it has asked financial services company JM Financial to look around for a buyer.

In the race are several large healthcare companies such as Fortis Healthcare and Apollo Hospitals, as well as private equity firms who are looking to tap the sunrise sector.

Actis had invested in the multi-super speciality hospital in Ahmedabad in 2006. Initially it invested $15.5 million to acquire 41 per cent.

Substantial stake

In subsequent years, it upped its investments in Sterling AddLife India Ltd., which owns and manages the hospital chain, to own a large majority share. According to sources, Actis may now have a substantial equity in Sterling, while the remaining stake lies with Mr Girish Patel, Chairman of Sterling Hospitals.

Mr Patel, it may be recalled, was the founder and chairman of Paras Pharmacueticals Ltd, who sold his family's stake in the business along with Actis in December 2010 to Reckitt Benckiser Group plc.

Actis had a 63 per cent holding in Paras, which it sold off to the global FMCG major for approximately $726 million. It was at this time, before the sale, that Sterling Addlife was demerged from Paras Pharmacueticals.

Manifold growth

Since then the hospital chain has grown several fold. According to its Web site, Sterling Hospitals, which came into existence in December 2000, has now crossed the 1000-bed mark with additional state-of-the art hospitals at Rajkot, Surat and Bhavnagar. It operates hospitals in Ahmedabad (300 beds), Vadodara (110), Rajkot (190), Mundra SEZ (100) and Bhavnagar (180).

The chain claims to have a host of “critical specialties such as cardiology and CVTS surgeries, neurology and neuro-surgeries, nephrology and kidney transplant, GI medicine and surgeries, hematology, oncology and onco-surgery, critical and emergency care, trauma and orthopedic, neonatology as well as general medicine and surgeries”.

Actis, which has made multiple investments in India, has an exposure of $3.1 billion in businesses in the emerging markets. When contacted about its intention to exit from Sterling Hospitals, the Actis spokesman said the firm does not comment on market speculation.

Published on June 19, 2011

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