Private equity firm True North will buy Max India’s 51 per cent holding in health insurance JV, Max Bupa Health Insurance Company (Max Bupa).

Enterprise value

The all-cash transaction values Max Bupa at an enterprise value of ₹1,001 crore, and would lead to a cash inflow of ₹511 crore for Max India. Currently, Max Bupa is capitalised at ₹969 crore.

Bupa, the existing JV partner with a 49 per cent stake in Max Bupa, will remain committed to the joint venture and continue to play an active role in the company through its board positions To nominate directors

At the conclusion of the transaction, True North will nominate directors on Max Bupa’s board, while Max India’s nominated directors will step down. The use of the Max brand will be phased out over a period of two years and replaced with a suitable name. The Bupa brand name will continue as before.

Commenting on the transaction, Analjit Singh, Founder and Chairman, Max Group, said: “We are rebalancing our portfolio of businesses with a much sharper focus on growing shareholder value, and this transaction is a step towards that journey.

“We are proud of the high-quality organisation we have created in Max Bupa, with its innovative product portfolio, balanced channel mix and its customer first orientation. We are sure that Max Bupa will continue its excellent performance under its new shareholders, ably supported by the founding JV partner Bupa.”

Divya Sehgal, Partner,True North, said: “As the health insurance sector grows in India, True North is looking to build the most-trusted brand in health insurance in the country.

“We believe Max Bupa is one of the best-positioned brands and businesses in the sector.”

KPMG Corporate Finance acted as lead financial advisor to Max India in this bilateral transaction with True North. AZB & Partners and Khaitan & Co acted as legal advisors to Max India and True North, respectively.

 

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