Global financial powerhouse Goldman Sachs has picked up a 49 per cent stake in Bangalore-based BPL Medical Technologies, the health care arm of BPL Ltd, for Rs 110 crore.
BPL, which was once the market leader in the consumer electronics segment, recently spun off its medical equipment business into a separate entity, potentially opening the gates for private equity investment into this fast-growing segment. In addition to this business, BPL has presence in the smart home equipment, power generation and telecom equipment businesses.
The fresh infusion will be used to further expand the company’s medical device business into areas such as imaging and neo-natal care. Established in 1963, BPL started manufacturing precision electrical instrumentation and diversified into medical devices in 1967. Over its 46-year history, BPL has developed a strong brand and a robust distribution and service network for the medical device business.
BPL currently has a turnover of Rs 100 crore and is operationally profitable, but due to legacy debt issues, it has been posting losses for the past many years.
“We are keen to partner with Goldman Sachs to expand our product range and geographic footprint. Goldman Sachs brings a global perspective, coupled with extensive experience investing in India,” said Ajit Nambiar, chairman and managing director of BPL.
Added Ankur Sahu, co-head of private equity in Asia at Goldman Sachs: “This investment reflects our continued focus on the Indian health care sector, where we will continue to fund segments. Leveraging our global health care expertise and relationships, we are excited to partner with the BPL group.” Sahu and Harsh Nanda, an executive director at Goldman Sachs, will join the board of BPL Med.
Goldman is an active investor in India. Since 2006, the firm has deployed more than $2 billion (Rs 10,950 crore on Monday) in the country. Globally, Goldman has invested over $8 billion in the health care sector spread across 30 companies, including Biomet, iHealth Technologies and AssuraMed in the US; Mindray Medical and iKang Guobin in China and Nova Medical Centers and Max India locally.
BPL currently has a turnover of Rs 100 crore and is operationally profitable, but due to legacy debt issues, it has been posting losses for the past many years. BPL, however, during the past two quarters has managed to settle the long-standing legacy debt issues consolidated with Deutsche Bank by hiving off majority of its expansive land bank.
In addition to the medical equipment business, BPL is in the final stages of setting up its thermal power plant in Andhra Pradesh and this vertical is expected to start contributing to revenues by 2015-16. It is understood that BPL is exploring an option of divesting stake in this project, in which the company has invested close to Rs 150 crore as equity.
BPL is also betting on another sector — smart home solutions. "We are among the early movers in this segment, and going forward, solutions such as the ones provided by us will be a standard fittment in most of the residential flats,” a senior company executive said.