Aster and Blackstone-backed High quality Care to Merge and Create One of many High 3 Hospital Chains in India with 10,150+ beds
Aster DM Healthcare Restricted (“Aster”), considered one of India’s largest and quickest rising built-in healthcare service suppliers, and High quality Care India Restricted (“QCIL” or “High quality Care”), backed by Blackstone and TPG, one of many largest privately held hospital chains in India with a give attention to rising cities, have at the moment signed definitive agreements for a merger. The merger has been authorised by the Board of Administrators of the respective corporations and is topic to regulatory, company and shareholders’ approvals. The merged listed entity might be named Aster DM High quality Care Restricted.
Aster DM High quality Care Restricted could have a mixed portfolio of 4 main manufacturers: Aster DM, CARE Hospitals, KIMSHEALTH and Evercare. The mixed entity could have a of community of 38 hospitals and 10,150+ beds unfold throughout 27 cities making it one of many high 3 hospital chains in India.
Rationale for the merger:
1. Scale: Create one of many high 3 hospital chains in India when it comes to income & variety of beds (38 hospitals & 10,150+ beds) with sturdy presence throughout South & Central India
2. Enhanced Metrics: Robust monetary and operational metrics with superior margins and returns put up transaction
3. Accretive: Merger is anticipated to be EPS accretive
4. Diversification: Nicely-diversified presence throughout 9 Indian states and a low overlap of hospitals together with a rising 360-degree ecosystem of labs, clinics and pharmacies
5. Synergies: Mixture anticipated to end in synergies from income, procurement & provide chain, capex, and integration of company capabilities. The Merged Entity is positioned for substantial income development, leveraging medical depth to drive future success
6. Progress Potential: Important alternatives for each brownfield and greenfield enlargement (c.3,500 new beds anticipated between FY24-27)
7. Backed by international marquee buyers: Blackstone and TPG, among the many world’s largest different asset managers, are extremely reputed within the Indian public markets having backed quite a few corporations within the listed house
Dr. Azad Moopen, Founder and Chairman of Aster DM Healthcare, stated: “The brand new mixed entity ‘Aster DM High quality Care Ltd.’ is poised to turn out to be one of many largest healthcare gamers within the trade, setting new benchmarks in patient-centric care, innovation, and accessibility. Aster with nearly 4 a long time of management in GCC and India continues to be one of many greatest healthcare leaders in each the areas. The Moopen household who has been instrumental in managing Aster’s India and GCC companies may also lead the brand new merged entity. Thus, by combining the strengths of two pioneers, we’re not solely increasing our footprint but in addition making a transformative drive able to reshaping the healthcare panorama. The mixing of Aster and High quality Care’s intensive community and deep operational experience with backing from Blackstone and TPG – among the many most revered non-public fairness corporations will improve our means to ship world-class healthcare companies, drive innovation, and enhance affected person outcomes. The merger may also present our medical professionals with a possibility to cater to larger and numerous affected person inflows.”
Mr. Amit Dixit, Head of Asia for Blackstone Non-public Fairness, stated: “We’re dedicated to creating considered one of India’s main platforms within the healthcare sector. It’s in our DNA to be a builder of companies – utilizing our scale, operational experience, and international life sciences insights, we are going to assist develop the platform, develop its footprint, and develop it right into a world-class healthcare establishment. We’re excited to companion with the Moopen household which shares our values and powerful governance requirements. We consider Varun Khanna is a terrific chief and can assist construct the mixed entity.”
Ms. Alisha Moopen, Deputy Managing Director of Aster DM Healthcare, stated: “Setting gold requirements in international healthcare has all the time been our guiding motto at Aster. The accelerated development of Aster over the past 10 years in India showcases our deep medical management and our means to reply and cater to the market demand forward of the curve. Combining the best requirements of service excellence while setting benchmarks for medical outcomes has been our hallmark, distinguishing us from our friends. By this merger with High quality Care, backed by Blackstone and TPG, we’re creating a robust drive that may elevate healthcare requirements via this strategic partnership.”
Mr. Ganesh Mani, Senior Managing Director at Blackstone Non-public Fairness, stated: “Life sciences is a key funding theme for Blackstone globally. Now we have constructed a novel healthcare non-public fairness observe in India together with a transformative buy-and-build hospital chain platform at High quality Care. The partnership between Aster and High quality Care is anticipated to considerably profit sufferers, clinicians, staff, the group, and shareholders. Our focus is on enhancing affected person care and expertise via investments in best-in-class infrastructure and know-how, and guaranteeing that we ship top-notch high quality of care.”
Mr. Vishal Bali, Senior Advisor at TPG, stated: “Healthcare has lengthy been a thematic focus for TPG globally and in India, and we’re happy to see High quality Care’s partnership with Aster to create considered one of India’s high 3 multi-specialty hospital chains. TPG has been a long-term investor within the hospitals section in India, and is targeted on constructing establishments of healthcare with a basis of steady high quality enchancment and standardized care to enhance medical outcomes and affected person security.”
Mr. Varun Khanna, Group Managing Director of High quality Care, stated: “This merger demonstrates our aligned cultures and worth methods, and furthers our dedication to deal with mattress scarcity in India’s underserved areas. The groups at Aster and High quality Care have established a robust legacy of positively impacting sufferers’ lives and assembly the evolving wants of communities. I stay up for main this platform into a brand new period centered on healthcare excellence and serving the perfect pursuits of the sufferers.”
Aster is valued at a a number of of 36.6x on FY24 adjusted put up IND AS EV/ EBITDA. As compared, QCIL is valued at a a number of of 25.2x primarily based on FY24 adjusted put up IND AS EV/ EBITDA. Based mostly on the swap ratio really useful within the valuation report, the resultant shareholding of the Merged Entity might be 24.0% and 30.7% held by Aster Promoters and Blackstone respectively, with the steadiness 45.3% being held by public and different shareholders.
Forward of this merger, Aster shall buy 5.0% stake in QCIL from Blackstone and TPG in consideration of major share issuance by Aster for 3.6% stake (“Preliminary Share Acquisition”). Submit the Preliminary Share Acquisition, QCIL might be merged into Aster by means of a scheme of amalgamation. The transaction is topic to shareholder & regulatory approvals, and different customary situations to closing. Aster expects the merger transaction to shut by Q3 FY26. The ratio for the Preliminary Share Acquisition is similar as proposed for the merger.
Topic to vital approvals, (i) Aster Promoters and Blackstone will maintain equal illustration on the board and collectively oversee the Merged Entity; (ii) Dr. Azad Moopen will proceed because the Govt Chairman of the Merged Entity; (iii) Mr. Varun Khanna and Mr. Sunil Kumar might be promoted to the place of MD & Group Chief Govt Officer and Group Chief Monetary Officer of the Merged Entity respectively.
Moelis & Firm and Advay Capital acted as monetary advisors, with Kotak Funding Banking as company advisor and Cyril Amarchand Mangaldas as authorized counsel to Aster. Blackstone and TPG, on behalf of QCIL, was suggested by NovaaOne Capital as their monetary advisor with Trilegal and JSA performing as authorized counsel. PwC really useful the swap ratio as an impartial registered valuer and ICICI Securities supplied the equity opinion on the swap ratio.
About Aster DM Healthcare Restricted in India
Aster DM Healthcare Restricted is likely one of the largest & quickest rising built-in healthcare service suppliers working in India with a robust presence throughout major, secondary, tertiary, and quaternary healthcare via its rising community in 19 hospitals, 13 clinics, 212 pharmacies, and 232 labs and affected person expertise facilities throughout 15 cities, delivering a easy but sturdy promise to completely different stakeholders: “We’ll deal with you effectively.”
About High quality Care India Restricted
QCIL starting in 1997, has grown into a number one multi-specialty healthcare supplier. QCIL’s healthcare troika contains CARE Hospitals, KIMSHEALTH and Evercare. With a community of 26 healthcare facilities working over 5,150+ beds throughout 14 cities, QCIL is likely one of the largest hospital networks in India centered on rising markets. The group’s amenities, accredited by NABH and JCI, supply over 30 medical specialties with a crew of two,500+ docs. QCIL has pioneered quite a few medical milestones, together with India’s first indigenous coronary stent, the primary fetal coronary heart surgical procedure, and the primary womb transplant. The group is pushed by its core values of transparency, compassion, excellence, and fairness, reflecting its dedication to moral and affected person centric care.
About Blackstone
Blackstone is the world’s largest different asset supervisor. Blackstone seeks to ship compelling returns for institutional and particular person buyers by strengthening the businesses through which it invests. Its greater than $1.1 trillion in belongings below administration embrace international funding methods centered on non-public fairness, life sciences, development fairness, actual property, infrastructure, credit score, secondaries and hedge funds.
About TPG
TPG is a number one international different asset administration agency, based in San Francisco in 1992, with $239 billion of belongings below administration and funding and operational groups world wide. TPG invests throughout a broadly diversified set of methods, together with non-public fairness, affect, credit score, actual property, and market options, and our distinctive technique is pushed by collaboration, innovation and inclusion. Our groups mix deep product and sector expertise with broad capabilities and experience to develop differentiated insights and add worth for our fund buyers, portfolio corporations, administration groups, and communities. For extra data, go to www.tpg.com.