MUMBAI: Temasek Holding along with TPG Growth and Abraaj Capital are vying to acquire multi-specialty healthcare chain Care Hospitals in a deal estimated at $270 million (Rs 1,700 crore). The two competing bids are in a close race after majority owner and private equity investor Advent International decided to sell its stake.
The two bidders have valued Advent's stake at slightly below the asking price of Rs 1,800 crore, though Temasek and TPG Growth combine is said to have offered slightly higher than the Dubai-based Abraaj, which manages assets worth $9 billion. Both the bids for India's fifth largest hospital network are still in contention.
Hyderabad-headquartered Quality Care India runs 17 hospitals with 2,400 beds across nine locations under the Care brand. A team of medical professionals led by Dr B Soma Raju retains minority shares. Investment bank Moelis & Co is advising Advent on the sale process.
The other bids from Everstone Capital-Hinduja Hospital, Baring Asia and Bain Capital-Netcare Hospital came with a lower valuation. Advent, which initially invested $110 million for a 60% stake, pumped in more money to help Care's expansion plans and increased its shareholding in the company . The hospital chain is poised to add 600 more beds in the near future through greenfield and brownfield expansion taking the overall count to 3,000 beds.
Healthcare is one of the top priority sectors for most marquee private equity funds with some having investments in more than one hospitals. Temasek Holdings, for instance, has investments in Gurgaon based Medanta Hospital and cancer care specialist HealthCare Global Enterprises.
"Interest in private hospital chains has gone up because of the robust growth in the healthcare sector aided by the rise in healthcare spending by public due to increased awareness of health and hygiene, greater penetration of health insurance and growing number of international patients visiting India for low-cost, high-quality treatments," said Abhay Soi, chairman, Radiant Life Care, which manages Mumbai's iconic Nanavati hospital. The healthcare sector is expected to touch $160 billion by 2017 and $280 billion by 2020, industry data showed.