Listing can happen in 18-24 months, says Manipal Education's Ranjan Pai

Our focus right now is to complete the transaction and the integration, said Pai

Ranjan Pai, chairman of Manipal Education and Medical Group, has been looking for a strategic acquisition to expand the scale of his health care empire. Speaking to Sohini Das, Pai says the acquisition of Columbia Asia would have been announced in March, if not for the pandemic. Edited excerpts:

With this acquisition, will you look at a listing on the bourses soon?

We are large enough to hit the capital markets even now. We firmly believe that in India there is still a long way to go in terms of markets caps and sizes. As of now we remain private and that gives us a lot of flexibility. We will look at the capital markets at the right time. We have not decided the timing. Our investors are also invested in the long term. Just because we go public, does not mean our investors will leave. They are also looking at long-term investments. They will be off-loading some stake through an initial public offer. 

This can happen in the next 18-24 months, but we do not yet know the timing. Our focus right now is to complete the transaction and the integration. 

Was the Columbia Asia purchase expensive? How did you value it?

This was a good acquisition, not only to gain size. In the past, we did not want to acquire something for the sake of it. Even previous acquisitions we tried, we felt they were the right fit. 

It is both a geographical and a cultural fit. Doing the acquisition is the easy part, the tough part is integration. The integration will be easier in this case as the two entities are culturally aligned. Columbia is more of a professional promoter. In Manipal, too, the team runs the show. It is professionally driven, and not family driven. Columbia is a well run organisation and has a lot of talent. It will take six months to a year to integrate the businesses. Synergy will come more from consumables purchase. 

There are no plans of manpower rationalisation.  There were other bidders, too, and we were the last one standing. It was not a bilateral discussion. There were other private equity players and some strategic investors, who were interested. 

Did the Covid-19 pandemic influence the decision? 

We were ready to announce this deal around March, and Covid-19 just pushed us back by six months. Everything was done, the valuations were closed. May be there is a Rs 50-100 crore difference now. Good assets are good assets. It is a fair value —neither cheap, nor expensive. After the lockdown eased, we had a meeting of our board and our investors and we discussed that it ticks all the boxes. 

If one looks only at the short term, then one would wait. But, we see value in the long term. We get access to markets like East, Pune, Mysuru, Patiala, NCR.

How do you plan to fund the deal?

There will be a rights issue among all shareholders — TPG, Temasek and us. Some debt would be raised to. We are working on the debt component, but it will be around 50 per cent.