Advent Int'l may begin stake sale in Care Hospitals next month

Around six players to bid for its 72 per cent interest, valued at around $300 million

US-based private equity investor Advent International planned to seek open bids for its controlling stake in Hyderabad-based Care Hospitals in the next six weeks, sources said.

“Formal bidding will begin in the next six weeks. A lot of people have approached Advent for its interest in Care Hospitals," the sources added. Interested parties include the Carlyle Group, Baring Private Equity Asia, South Africa's Netcare, Malaysia's IHH Healthcare and Fortis Healthcare.

 

Advent is expecting around $300 million for its 72 per cent stake, valuing Care Hospitals at $400 million. With an investment of $110 million in Care Hospitals since 2012, Advent has seen an over two-fold jump in value. The remaining 28 per cent stake is held by a group of Indian doctors.

Advent declined to comment on the sale. Care Hospitals’ Chief Executive Officer Dilip Jose said he would "not be able to comment" on the transaction.

Care Hospitals staff confirmed executives from the Carlyle Group had visited its facilities in the first week of June.

Advent was also considering retaining some stake in Care Hospitals, sources said. "This arises if a strategic investor brings long-term value to the company. The company may opt for it despite it not being the highest bidder," the source added.

Care Hospitals has 17 hospitals and 2,400 beds in nine cities. The chain is setting up a hospital in Bhubaneswar.

IHH Hospitals of Malaysia, Asia's largest hospital operator by market value, has acquired a 51 per cent stake for Rs 281 crore in city-based Continental Hospitals. Malaysian sovereign wealth fund Khazanah is the largest shareholder in IHH Hospitals.

According to Bain & Co’s Global Healthcare Private Equity Report for 2015, Indian companies that have developed cost-effective models for delivering health care are starting to expand into other emerging markets.