US-based private equity firm Advent International will open bids for its controlling stake in Hyderabad-based Care Hospitals in the next six weeks, given the interest from various international funds.
Indian business daily, Business Standard cited sources, as saying the formal bidding will begin in the next six weeks.
“A lot of people have approached Advent for its interest in Care Hospitals,” the sources said, noting that the interested parties include the Carlyle Group, Baring Private Equity Asia, South Africa’s Netcare, Malaysia’s IHH Healthcare and Fortis Healthcare.
Advent is expecting around $300 million for its 72 per cent stake, valuing Care Hospitals at $400 million. With an investment of $110 million in Care Hospitals since 2012, Advent has seen an over two-fold jump in value. The remaining 28 per cent stake is held by a group of Indian doctors.
However, Advent was also considering retaining some stake in Care Hospitals, the sources said. “This arises if a strategic investor brings long-term value to the company. The company may opt for it despite it not being the highest bidder,” the source added.
Advent declined to comment on the sale while Care Hospitals’ CEO Dilip Jose said he would “not be able to comment” on the transaction.
Care Hospitals staff however confirmed executives from the Carlyle Group had visited its facilities in the first week of June.
Care Hospitals has 17 hospitals and 2,400 beds in nine cities. The chain is setting up a hospital in Bhubaneswar.
IHH Hospitals of Malaysia, Asia’s largest hospital operator by market value, has acquired a 51 per cent stake for Rs 281 crore in city-based Continental Hospitals. Malaysian sovereign wealth fund Khazanah Nasional is the largest shareholder in IHH Hospitals.
According to Bain & Co’s Global Healthcare Private Equity Report for 2015, Indian companies that have developed cost-effective models for delivering health care are starting to expand into other emerging markets.