Fortis Healthcare on Thursday announced the signing of definitive agreements for sale of its hospital business operations at Vadapalani, Chennai to Sri Kauvery Medical Care (India) Ltd for a consideration of ₹152 crore.

The all-cash deal is estimated to be consummated by end of July 2023 subject to certain conditions as stipulated in the definitive agreements, Gurgaon-based Fortis Healthcare said in a regulatory filing. 

The development comes in the midst of Tamil Nadu-based Kauvery Hospital Group’s plans to scale up its capacity to 3,500-plus beds across South India in the next three years. The multi-speciality hospital chain currently has a network of nine hospitals with over 1,500 beds spread across six cities — Chennai, Tiruchi, Bengaluru, Salem, Hosur and Tirunelveli.

In May, Kauvery Hospital inaugurated a 250-bed hospital on Radial Road in south Chennai. 

The Fortis Vadapalani facility, which is on leased premises, was commissioned in October 2020 and is located on Chennai’s arterial Arcot Road. It currently has 110 operational beds with a potential to scale up-to approximately 200 beds.

Commenting on the latest deal,  S Chandrakumar, Founder & Executive Chairman of Kauvery Group of Hospitals, said with this acquisition, the healthcare chain has over 750 beds in Chennai.

For Fortis Healthcare, the deal is part of its ongoing portfolio rationalisation strategy in order to focus on deepening its presence in select geographic clusters where it has a sizeable presence.

Ashustosh Raghuvanshi, Managing Director & CEO, Fortis Healthcare Ltd, said “The divestment of Arcot Road hospital business operations is in line with our stated intent of optimizing our hospital assets keeping in mind our key markets and regions. 

“This also underpins our focus on improving our overall profitability and margins in the segment, allowing us to re-allocate capital in our key clusters,” he added.

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