Manipal Health Enterprises (MHE), one of the largest hospital chains in India, confirmed on Monday that it would sell an additional 41 per cent stake to Temasek Holdings, a Singapore government-owned fund, bringing the total holding of the fund in the company to 59 per cent.
The hospital chain is valued at ₹40,000 crore, and the deal value of the hospital chain is believed to be $2 billion, which is 40 per cent of the company’s value, according to sources in the know of the happening. businessline reported on the deal on Friday.
The deal is said to be completed upon receipt of customary regulatory approvals from Temasek Holdings.
Prior to the latest deal, Sheares Healthcare Group, a wholly-owned subsidiary and independently-managed portfolio company of Temasek, held an 18 per cent stake and will retain the same.
While global alternative asset management firm TPG, which first invested in MHE through TPG Asia VI in 2015, will fully exit, it will still hold an interest of 11 per cent in MHE, through its new Asia fund — TPG Asia VIII. National Investment & Infrastructure Fund (NIIF) will sell its holdings in MHE.
Following the closing of the transaction, Manipal Group’s stake will reduce to 30 per cent from 52 per cent, said the company in a statement.
Ranjan Pai, Chairman of Manipal Group, said, “We are very glad for Temasek’s acquisition of a significant stake in Manipal Health Enterprises and its support to the management team in building out the platform to its full potential. Investing in healthcare requires a long-term outlook as well as a sensitivity to social responsibility.”
The Bengaluru headquartered hospital chain operates a network of 29 hospitals across the country.
“Since our investment in 2015, we have witnessed Manipal’s transformational journey of becoming one of the largest, best-managed and patient-centric healthcare networks in India. By re-investing through our new Asia fund — TPG Asia VIII, we look forward to continuing to support Manipal’s mission of bridging the quality healthcare infrastructure gap in the country,” said Puneet Bhatia, Co-Managing Partner of TPG Capital Asia.
Allegro Capital Private Limited acted as the financial advisor on this transaction.
Padmanabh Sinha, Executive Director and Chief Investment Officer, Private Equity of National Investment and Infrastructure Fund said, “The company demonstrated exceptional performance and following our investment, it successfully executed a transformational acquisition that catapulted Manipal Hospitals to become a segment leader in the Indian healthcare services space.”
Sinha added, “We made this investment when elective procedures and medical tourism were at a standstill due to the pandemic, and the timing of recovery was uncertain. Our investment in Manipal is an example of SOF’s strategy to invest in high-growth businesses which can become market leaders in India.”
This transaction comes even as Manipal Hospitals looks to acquire Kolkata’s AMRI Hospitals for about ₹2,400 crore.