India: Multiples PE puts Vikram Hospital stake on sale

Multiples Alternate Asset Management Pvt. Ltd, a private equity (PE) fund led by Renuka Ramnath, has initiated the process to sell its stake in Vikram Hospital (Bengaluru) Pvt. Ltd for nearly Rs.450 crore, said two people directly familiar with the matter.

“They have recently launched the process to sell its stake in Vikram Hospital and have been showing the asset to private equity funds. The PE firm has been working on increasing efficiencies of the hospital to realize maximum value during the sale process,” said one of the two people cited above.

An email sent to Multiples founder Renuka Ramnath on Thursday went unanswered.

Multiples has mandated Moelis and Co. to run the process on the back of the investment bank’s successful sale of Advent International’s stake in Hyderabad-based hospital chain CARE India Ltd to Dubai-based Abraaj Group in January.

In an emailed response, Moelis declined to comment.

“Multiples is in the process of exiting three-four investments during this year from its maiden fund and this is one of the first this year where the formal process has begun,” said the second person mentioned above.

The fund acquired a majority stake in Vikram Hospital in 2013 for nearly Rs.180-190 crore, Mint had reported. As part of the investment, Multiples had acquired the 64% stake that ICICI Venture Funds Management Inc. used to own in the hospital, besides infusing capital for debt repayment.

Vikram Hospital is a 225-bed healthcare service provider with primary specialities in cardiac sciences, neurosciences, bariatric and metabolic surgery, and nephrology and urology.

According to documents available with the Registrar of Companies (RoC), Vikram Hospital’s revenue rose to Rs.97.50 crore in 2014-15 from Rs.81.4 crore in the previous year. It posted a loss of Rs.15.60 crore in 2014-15. Financials for the latest year were not available with the RoC.

“For Multiples, the asset turnaround story of Vikram Hospital gives them confidence to look at distressed assets as a segment. Though it was a smaller transaction, they are hinging on their ability to turnaround assets,” the second person added.

The potential in the Indian healthcare system has prompted many investors to acquire significant stakes in hospital chains. In recent months, deal activity in the space has picked up. Many hospitals are mulling initial public offers.

Some of the hospital chains that are up for sale include IDFC Alternatives Ltd-backed Sahyadri Hospitals Ltd, the largest chain of multi-specialty hospitals in Maharashtra, and Ascent Capital Pvt. Ltd and OrbiMed Advisors LLC-backed Kerala Institute of Medical Sciences (KIMS), the hospital chain with a presence in India and West Asia.

“We are surely seeing an increase in hospital transactions, but now a lot of them are going the strategic acquisition route. This is mostly following one PE round or two making way for the investor’s exit. The market has around 4-5 such deals presently and more are expected in the following months,” said Abhishek P. Singh, director, healthcare, PricewaterhouseCoopers India Pvt. Ltd.

Singh added that the phenomenon shows the hunger that larger domestic players or international players have for the increasing demand in the country. “There are less quality assets than the demand for them. There is a good momentum in the secondary market as well with some large quality assets going that route,” he added.

Vikram Hospital was the maiden transaction in the healthcare space by Multiples from its first fund of $405 million, which it had raised in 2010. The fund had made 11 investments from its first fund.

As part of returning capital to its limited partners (LPs), in October last year, the fund sold off 10% stake in e-commerce logistics firm SSN Logistics Pvt. Ltd, which operates the Delhivery courier service, to Tiger Global Management Llc.

In 2014, the fund had also partially exited its investments in South Indian Bank Ltd and movie exhibition firm PVR Cinemas Ltd. It reinvested in PVR last year along with its LPs after the company acquired DT Cinemas chain for nearly Rs.500 crore.

For its second fund, Multiples has recently raised more than $651.5 million from offshore and domestic investors and has already made two investments. It has launched a housing finance firm with equity capital infusion of Rs.100 crore. It counts Canada Pension Plan Investment Board as one of its large LPs.

This article was first published on Livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.