Fortis Healthcare, a leading healthcare delivery service provider in India on Thursday signed a definitive agreement to sell its hospital business operations at Vadapalani, Chennai to Sri Kauvery Medical Care for a sale consideration of Rs 152 Crore, the company said in an exchange filing. Fortis said that the transaction will be an all-cash deal and is estimated to be consummated by the end of July 2023, subject to certain conditions as stipulated in the definitive agreements.
The facility, which is on leased premises, was commissioned in October 2020 and is located on the arterial Arcot Road. It currently has 110 operational beds with a potential to scale up-to approx. 200 beds. The aforesaid divestment is a part of the Fortis’ ongoing portfolio rationalization strategy in order to focus on deepening its presence in select geographic clusters where it has a sizeable presence.
Dr Ashustosh Raghuvanshi, Managing Director & CEO, Fortis Healthcare Limited, commented: “The divestment of Arcot Road hospital business operations is in line with our stated intent of optimizing our hospital assets keeping in mind our key markets and regions. This also underpins our focus on improving our overall profitability and margins in the segment, allowing us to re-allocate capital in our key clusters.”
The acquisition of Vadapalani facility is in line with Kauvery’s strategy to further expand its presence in Chennai, in addition to its existing facilities of 500+ beds at Alwarpet & Radial Road.
Dr S Chandrakumar, Founder & Executive Chairman of Kauvery Group of Hospitals commented: We are focused on our growth plan to become a leading and trusted healthcare provider in South India. With this acquisition, we will have 750+ beds in Chennai.
Dr S Manivannan, Founder & Managing Director of Kauvery Group of Hospitals said, “Kauvery continues to provide best-in-class personalized care, with the highest standards of clinical excellence and ethical practices. This acquisition helps us to expand our care to more regions in Chennai.”
For Fortis, Saraf and Partners, Law Offices acted as legal advisors and Veda Corporate Advisors acted as financial advisors for this transaction. And for Kauvery, Khaitan & Co and Shardul Amarchand Mangaldas & Co acted as legal advisors for this transaction.