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The Abraaj Group, a Dubai based private equity investor, is acquiring majority stake in country's fifth largest healthcare service provider CARE Hospitals from private equity firm Advent International.
Totally, Abraaj Group will invest about Rs 2,000 crore in a three-part transaction. This includes the purchase of Advent International's entire 72% stake in the hospital chain for about Rs 1,300 crore, purchase of a small portion of CARE hospital promoter B Soma Raju's stake and fresh capital infusion. Post the transaction it will hold 75-78% stake in the hospital chain.
“Abraaj has taken a majority stake in CARE and the promoters have retained a significant minority in the business and will remain active partners with us. We will be injecting primary capital into the business and intend to continue doing so in order to fully expand and grow the CARE healthcare platform,” a company spokesperson said in an e-mail response. Over the last year, CARE hospital has enjoyed double digit growth and margin expansions,” she added.
This is Abraaj Group's 28th investment in healthcare care sector across various geographies.
Established in 1997 by Dr B Soma Raju, Hyderabad-based CARE is the fifth largest healthcare provider in India, operating 2,600 beds across 16 hospitals in nine cities. Advent International – which has almost $33 billion of assets under management - acquired 72% stake in CARE hospitals at Rs 610 crore in 2012.
Over the last four years the hospital chain has expanded operations by adding key specialties, increased capacity through acquisitions and addition of beds. By end of 2016 the number of hospital beds is expected to rise to 2,800 with expansion of existing hospitals in Raipur and Pune. Post this deal CARE Hospitals' management is also expected to focus on expanding healthcare deliveries especially in under served markets.
In a statement Sev Vettivetpillai, Partner and Global Head of Abraaj’s Thematic Funds Business, said: “The implications of the healthcare gap in India are profound, but they translate into a long-term opportunity for Abraaj to help build a better and more sustainable healthcare infrastructure in the country. Led by dedicated founders and a strong management team, CARE has been a pioneer in providing quality healthcare to middle and low income patients in India, and has the potential for further expansion domestically and internationally. We are excited to partner with one of India’s leading healthcare providers and contribute to developing more robust health systems in growth markets.”
