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Aster DM Healthcare has announced its acquisition of the Blackstone-backed Quality Care India through a share swap arrangement, in a significant step to becoming one of India’s top three hospital chains.
The combined entity, to be named Aster DM Quality Care Ltd, will operate a network of 38 hospitals with over 10,150 beds across 27 cities.
The acquisition is expected to be completed within 15 days of receiving approvals of shareholders and the Competition Commission of India (CCI), whichever comes later.
The merger is expected to significantly increase scale, according to Alisha Moopen, Deputy Managing Director of Aster DM Healthcare. “Scale is a significant factor in healthcare,” she told businessline. “Healthcare is a capital-intensive industry, whether it comes to Capex purchases, material costs, or manpower. Optimising all of these factors will play a crucial role in improving our overall performance.”
She further highlighted that the combined entity is projected to generate significant revenue, with estimates of a total of ₹7,300 crore.
Additionally, the company expects an EBITDA of approximately ₹1,400 crore, reflecting a strong margin of 19 per cent.
Share swap
Under the agreement, Aster DM will issue 1.86 crore shares to acquire 1.9 crore shares of Quality Care India Ltd. (QCIL), which are currently held by Blackstone entities BCP Asia II TopCo IV Pte. Ltd. and Centella Mauritius Holdings Ltd. Following the share swap, Aster DM shareholders will hold 57.3 percent of the merged entity, while QCIL shareholders will hold 42.7 per cent.
Aster promoters and Blackstone will jointly control the merged entity, with stakes of 24 per cent and 30.7 per cent, respectively.
Synergies and growth plans
The healthcare major plans to expand both through greenfield and brownfield projects, with an expected addition of approximately 3,500 new beds between FY24 and FY27. Additionally, the merger is expected to generate synergies in revenue, procurement and supply chain, capex, and the integration of corporate functions, said the company.
The shares of Aster DM Healthcare closed at ₹499.95, up by 2.35 percent on the BSE.
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