Advent's stake sale in Care Hospitals heats up

Two more firms join the race

The stake sale in Hyderabad-based multi-specialty healthcare services provider Care Hospitals is getting bigger with two more players joining the race to acquire US-based Advent International's controlling stake.

Sources associated with the development said a "West Asian strategic investor" and a "Southeast Asian player" were the latest to join the open bidding process, which is expected anytime soon, valuing the global private equity company's 72 per cent stake at around $250 million (Rs 1,600 crore). Care Hospitals is estimated to be worth $350 million (Rs 2,200 crore).

With this, the list of potential buyers has moved to eight now, and sources said it was possible the number could jump to 10-12 in the next one month. It is learnt Carlyle Group, Baring Private Equity Asia, South Africa's Netcare, Malaysia's IHH Healthcare Bhd, Fortis Healthcare and Manipal Hospitals have shown interest in the upcoming bidding.

The southeast Asian player, according to reports, is Singapore-headquartered private equity fund, Everstone Capital Advisors Private Limited. With $2.5 billion worth of assets under management, Everstone is reported to have tied up with the Hinduja group's PD Hinduja Hospital for the bid. Advent India PE Advisors Private Limited managing director Shweta Jalan said the company "has no comments to offer" to the mail sent by Business Standard seeking details of the stake sale.

Meanwhile, sources in Care Hospital said the management was informed by Advent about the visit of interested PEs as a part of their due diligence prior to the open bidding.

"In a recent review meeting, we were provided the visit schedule of the interested investors by Advent. The visits could go on till the end of this month," the source said.

Care, which has 17 hospitals under its belt with 2,400 beds, expects the new investor to bring on board rich experience in dealing with global hospital standards. It is also considering having Advent as a long-term consultant in the aftermath of the latter's exit.

IHH Healthcare Berhad has already invested $50 million for a 51 per cent stake in city-based multi super specialty healthcare provider Continental Hospital. The deal had taken place in March this year. Continental is a 550-bed hospital located in the financial district of upmarket Cyberabad.

UK-based development finance institution CDC Advisors has invested in Rainbow Children's Hospital, and is not averse to increasing its stake in it. CDC Advisers had invested $16 million in the city-based hospital.

CDC Advisors' Private Ltd South Asia head N Srinivasan, speaking to Business Standard, had said high-quality health care would come under premium in the country, and added, the Indian affordable healthcare segment would attract greater interest from global investors.

Rainbow plans to raise Rs 60-70 crore equity for establishing a hospital with a capacity of 150-bed each in Pune and Jaipur, according to its chairman and managing director Ramesh Kancharla.