- Executed definitive agreements to acquire 73.4% majority stake (on fully diluted basis) immediately at completion
- Five hospital facilities with approximately 1,100 operational beds
- Acquisition to provide enhanced access to rapidly growing demand for private healthcare in India
KUALA LUMPUR, 28thAugust 2015 - IHH Healthcare Berhad ("IHH" or the "Group"), today announced that it has signed definitive agreements to acquire a 73.4% stake (on fully diluted basis), immediately at completion, in the India based Ravindranath GE Medical Associates Private Limited ("Global Hospitals") for INR 12.84 bn (RM 819 million) through its indirect wholly-owned subsidiary, Gleneagles Development Private Limited ("GDPL"). As part of this transaction, IHH will use INR 2.65 billion (RM169 million) to fund the hospital chain's capex requirements and to optimise its current cost of borrowing.
Global Hospitals is one of the leading private hospital chains in India. It has a track record in delivering multi-specialty tertiary and quaternary care, particularly in multi-organ transplants, hepatobiliary diseases and gastroenterology. Founded in 1999, Global Hospitals operates a chain of five hospitals (supported by three feeder centers) with approximately 1,100 operational beds in Hyderabad, Bangalore, Chennai and Mumbai. The number of operational beds is expected to ramp up to approximately 1,900 beds within the next 5 years.
To better leverage brand equity and coordinate branding efforts, IHH plans to consolidate all of Global Hospitals facilities under IHH's "Gleneagles" brand.
Dr Tan See Leng, Managing Director and Chief Executive Officer of IHH, said, "This will be a game-changer for IHH in India. Together with our existing hospitals, the acquisition of Global Hospitals catapults us towards becoming one of the leading hospital groups in India.
India has tremendous growth potential with its rapidly increasing demand for quality private healthcare. We are excited to bring our track record of providing superior patient outcomes and will ensure the change of ownership will be seamless for both patients and employees. The hospitals will continue to deliver the best-in-class medical care and outcomes that both IHH and Global Hospitals are known for."
The acquisition augments and complements IHH's position among the leaders in the quaternary care segment. IHH's India portfolio comprises approximately 1,800 beds with potential to reach up to 4,000 beds in the next 5 years.
Dr K Ravindranath, Founder and Chairman of Global Hospitals, said, "We are delighted to join the IHH family which shares our commitment to ensuring superior clinical outcomes for our patients. With IHH's international experience and best-in-class- knowhow, and our growth potential, we look forward to our enhanced ability to better meet the healthcare needs of Indians as well as international medical travellers."
With its expanded presence in India, IHH aims to extract further business synergies, cost savings and operating leverage through centralised procurement, optimised backroom functions, common branding and marketing strategy, sharing of doctors and better utilisation of facilities.
Tan Sri Dato' Dr Abu Bakar bin Suleiman, IHH Chairman, said, "This deal signifies IHH's continued commitment to expand in markets where there is strong, growing demand for quality healthcare. With this transaction, we remain confident in our ability to deliver sustainable, long-term value creation for our shareholders."
The acquisition of Global Hospitals boosts IHH's beds globally to more than 8,000 across 45 hospitals in 10 countries. Pending necessary approvals and satisfaction of certain conditions, the deal is expected to close within 3 months.
CIMB Securities (India) Private Limited and ICICI Securities Limited acted as the Financial Advisors to GDPL for this acquisition. GDPL's legal advisor for this acquisition is Khaitan & Co. and tax advisors are Deloitte Haskins & Sells and Ernst & Young.
Veda Corporate Advisors acted as the Financial Advisors to Global Hospitals and its shareholders. Global Hospitals' legal advisor for this acquisition is J. Sagar Associates and tax advisors are BMR Advisors.