Manipal Hospitals buys Fortis hospitals biz

Amiti Sen New Delhi | Updated on March 28, 2018

Ranjan Pai of Manipal Group and TPG Capital to infuse Rs 3,900 crore into the venture

Fortis Healthcare Ltd (FHL) has approved the demerger of Fortis Hospitals (its hospitals business) into Manipal Hospitals Enterprises Pvt Ltd, promoted by Ranjan Pai of the Manipal Group and private equity biggie TPG Capital Asia, who would infuse Rs 3,900 crore of fresh capital into the venture.

“The board (of Fortis Healthcare) has also approved the sale of its 20 per cent stake in SRL Ltd to Manipal Hospitals. The resultant entity Manipal Hospitals will be a publicly traded company listed on the NSE and BSE. The remaining FHL, will be an investment holding company, with 36.6 per cent stake in SRL,” according to an official release.

As part of the proposed transaction, the Rs 3,900 crore invested by Ranjan Pai of Manipal Group and TPG into Manipal Hospitals, will be utilised to finance the acquisition of 50.9 per cent stake in SRL (20 per cent from FHL and 30.9 per cent from other investors for which discussions are currently underway).

In addition, the investment will support the proposed acquisition of hospital assets owned by RHT Health Trust (RHT) and the growth of the hospitals and the diagnostics businesses, the release added.

“The demerger of Fortis’ hospitals business into Manipal Hospitals, promoted by Dr Ranjan Pai and backed by TPG, will unlock significant value for all stakeholders and will further accelerate and expand access to high quality healthcare services in India. We are happy and confident that the combination will be value accretive for all stakeholders,” according to a statement by promoters Malvinder Singh and Shivinder Singh.

The combination of Manipal Hospitals and Fortis Hospitals will result in the creation of the largest provider of healthcare services in India by revenue with 41 hospitals in India and 4 hospitals overseas and an installed bed capacity of over 11,000 (including teaching hospital beds of Manipal Hospitals), the official release said.

It will provide a staff pool comprising over 4,200 doctors, 9,300 nurses and 11,400 other employees across India.

The proposed transaction is subject to shareholders’ approval, creditors’ approval, applicable regulatory approvals (including Competition Commission of India, SEBI, stock exchanges and the National Company Law Tribunal (NCLT) and other customary conditions precedent.

Published on March 28, 2018

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