 "Focus will be on provider & payer segments: Sanjay Kalra & Mahesh Nagaraj")
Sanjay Kalra & Mahesh Nagaraj, chairman and MD, respectively, Shiv Nadar & Sanjay Kalra Associates LLP in an interaction with Bibhu Ranjan Mishra talks about the focus of the company and its future strategies Edited excerpts:
How is SNSK different from other investment companies?
Kalra: We are a specialised fund that is going to focus only in the health care, IT products and platform space in the US and North America. We picked up the US because it is a large market for health care. So, we are going to buy out assets in this space and create a portfolio of integrated companies. Once it is there, we would invest in some selected start-ups, which would supplement what the matured companies in our bouquet offer.
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Kalra: Over the next few years, we are looking to buy around 3-4 large companies, which could be in the range of $50-$200 million each. Then, we would acquire start-up firms to integrate them with these large ones. When we say matured companies, this means they should be having customers, revenues and hopefully profit.
Why did you pick up the health care sector?
Nagaraj: This segment in the US, is about $3.2 trillion in size which is about 17 per cent of the US GDP (gross domestic product). In the last seven-eight years, a new regulation has come in –the Affordable Care Act or Obama Care. The objective is to make health care cost affordable, which was really going out of control. This also started bringing down barrier to entry for companies, as there are opportunities getting created for new products and technologies to be adopted. there are great opportunities to capitalise on this and, buy out products and platforms to meet the requirements of the sector in the new world.
Will you look at a particular segment or all segments in the health care such as clinical trial, pharma, etc?
Nagaraj: Broadly, the sector can be divided into three areas -- providers (hospitals and so on); payers (who are the insurers) and life sciences and pharma. Our primary areas of focus are the providers and the payers, and also the clinical trial part of the life sciences and pharma segment.
Would you look at acquiring start-ups in India as well?
Kalra: We would only buy those start-ups that will help us in improving the performance of big companies we are buying. Otherwise, we won’t be in the business of independently investing in start-ups. For start-ups, we would look at both the US as well as India. The purpose is to find businesses which are serving customers in North America.
Would you eventually integrate the companies that you plan to acquire under a single umbrella?
Kalra: The purpose would be to build it in a place where we can provide integrated solutions. It (integration) will not happen from day one. But our purpose is to create a portfolio of companies where we will find synergies among these companies.
Are you building a team of in-house experts to help closing these deals?
Nagaraj: At present, we have a small in-house team to anchor some of the discussions, but the deal flow could happen through multiple networks including bankers, consultants and industry contacts. Going forward, we expect to grow to about 20 people over the next six to 12 months.
