Mumbai: Malaysian healthcare services major IHH Healthcare Bhd on Friday announced that it has signed definitive agreements to acquire a 73.4% stake in Ravindranath GE Medical Associates Pvt. Ltd (Global Hospitals) for Rs.1,284 crore.
The acquisition was done through its wholly owned subsidiary Gleneagles Development Pvt. Ltd, the firm said in a stock exchange filing.
As part of the transaction, IHH will infuse Rs.265 crore to fund the hospital chain's capex requirements and optimize its current cost of borrowing.
Founded in 1999, Global Hospitals operates a chain of five hospitals with approximately 1,100 beds across Hyderabad, Bengaluru, Chennai and Mumbai.
The number of operational beds is expected to increase to approximately 1,900 within the next five years, IHH said in the filing.
All of Global Hospitals' facilities will be brought under IHH's Gleneagles brand.
"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," said Dr Tan See Leng, managing director and chief executive officer of IHH.
IHH's India portfolio comprises approximately 1,800 beds with the potential to reach 4,000 beds in the next five years, the firm said. In March, it had acquired a 51% stake in Hyderabad-based Continental Hospitals for Rs.300 crore.
The acquisition of Global Hospitals takes IHH's beds globally to more than 8,000, across 45 hospitals in 10 countries.
With its expanded presence in India, IHH aims to extract further business synergies, cost savings and operating leverage through centralized procurement, optimized backroom functions, common branding and marketing strategy, sharing of doctors and better utilisation of facilities, the company said.
CIMB Securities (India) Pvt. Ltd and ICICI Securities Ltd acted as financial advisors to IHH, while boutique investment banking firm Veda Corporate Advisors acted as the advisor to Global Hospitals.