Radiant-Max Healthcare merged entity will operate over 3,200 beds through 16 hospitals across India.
Investment firm KKR-backed hospital management company Radiant Life Care has entered into a transaction whereby its shareholders will acquire a majority stake in Max Healthcare Institute from Max India. Earlier in the day, sources told BusinessLine that the companies are expected to announce the deal shortly, if not today.
READ THE STORY:Radiant Life Care closes in on Max Healthcare
The acquisition will be undertaken through a series of transactions, including Radiant’s purchase of a 49.7 per cent stake in Max Healthcare from South Africa-based hospital operator Life Healthcare in an all-cash deal. This will be followed by the demerger of Radiant’s healthcare assets into Max Healthcare, which will result in KKR and Radiant promoter Abhay Soi together acquiring a majority stake in Max Healthcare, the company said in a statement.
Demerger
Max India will demerge Max Healthcare Institute, which will be followed by the demerger of Radiant’s healthcare assets into Max Healthcare. This will result in KKR and Radiant promoter Abhay Soi together acquiring a majority stake in Max Healthcare, the company said in a statement.
A new entity – formed by the merger of Max Healthcare Institute and Radiant’s healthcare assets – will be formed. KKR will hold 51 per cent stake in the merged entity, about 23 per cent by Soi and 7 per cent by Max promoters and the remaining by the public.
The newly-listed combined entity of Max Healthcare and Radiant will have an equity valuation of Rs 7,242 crore. Avendus Capital was the financial advisor to Radiant Life Care and KKR on the transaction.
Abhay Soi, Chairman and MD, Radiant Life Care
The acquisition will be undertaken through a series of transactions, including Radiant’s purchase of a 49.7 per cent stake in Max Healthcare from South Africa-based hospital operator Life Healthcare in an all-cash deal. This will be followed by the demerger of Radiant’s healthcare assets into Max Healthcare, which will result in KKR and Radiant promoter Abhay Soi together acquiring a majority stake in Max Healthcare, the company said in a statement.
Radiant Life Care is promoted by entrepreneur Abhay Soi, with him holding a 52.6 per cent stake and the remaining being held by KKR. Upon closing, Soi will lead the combined company as its Chairman.
Among the top 3 hospital networks
The combination of Radiant and Max Healthcare will create the largest hospital network in North India and will place the entity among the top three hospital networks in India by revenue and the fourth largest in India in terms of operating beds.
The merged entity will operate over 3,200 beds through 16 hospitals across India, including tertiary and quaternary care facilities offering high end critical and super speciality care supported by strong local brands such as BLK Hospital, Max Saket Hospital, Max Smart Hospital, Max Patparganj Hospital and Nanavati Hospital.
The combined business is expected to provide significant growth potential and compelling business synergies. By providing best-in-class patient care, the combined business plans to address India’s growing demand for quality medical treatment.
“Radiant has achieved significant growth and expansion during a time of rapid industry consolidation, and the proposed acquisition of a majority stake in Max Healthcare marks an exciting step forward in our strategy to increase scale by merging with a leading and complementary hospital network. We are fortunate to have strong support from KKR as we continue our mission of providing superior medical services in India,” Soi, Chairman and Managing Director at Radiant, said.
“The merger offers significant growth potential with revenue and cost efficiencies to be extracted. Both Max and Radiant possess complementary sets of capabilities in running healthcare establishments and KKR brings with it extensive global experience and expertise in healthcare investments as well as capabilities in prudent financial management and efficient capital allocation,” Analjit Singh, Founder and Chairman Emeritus at Max Group said.
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Published on December 24, 2018
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