TPG, Warburg in race to invest $100 mn in Vasan

The rush of global private equity into the Indian healthcare has been on an upswing in the last year and going by the flow of deals, it continues to ride the crest of the wave. In a fresh round of fund raising activity, global private equity giants TPG Capital and Warburg Pincus are understood to be in various stages of discussions with Chennai-based Vasan Healthcare for a $100 million round of investment.

According to PE industry players, this fresh round of investment will be a combination of both primary and secondary transactions. Sequoia Capital has invested around Rs 250 crore over the past few years in this chain and is expected to reap healthy returns in the secondary transaction. The primary investment will fuel Vasan’s expansion plans which envisages expanding its network of eye care hospitals to 125 from the present 80 by March 2012.

The group, started in 1947, runs two multi-specialty hospitals and is putting up three more; has 40 pharmacy outlets and 15 diagnostic centres in Tamil Nadu. According to industry players, Vasan is understood to have had a topline of around Rs 350 crore during Fy11, up from Rs 250 crore during FY10 and has set a target of Rs 600 crore during Fy12.

A spokesperson for Vasan Group declined to comment on the financials and added that they were in discussions with various PE funds and will not be able to comment on the funds until they have signed an agreement.

In addition to having built up a sizeable presence in South India for its eye care hospitals, Vasan Healthcare is also looking to set up centres for gastroenterology, diabetes, dental, skin care among others. According to recent reports, Vasan Healthcare plans to open 50 dental care centres and 10 skin care centres in India and abroad as part of the expansion. Industry players indicate that this chain will have operations in Africa besides Sri Lanka and the United Arab Emirates.

If the investment from Warburg sails through in this deal, it will be the second major healthcare investment in India which this global fund will be executing in India in the recent past. During the last year, Warburg invested $85 million in the Mumbai-based Metropolis Healthcare, giving a healthy exit for ICICI Venture. Warburg is estimated to have invested around $2.5 billion in India over the past few years.

TPG Capital (formerly Texas Pacific Group) has over $47 billion of capital under management across a family of funds and its investments in India include the ones in Greenko , KLG Power and Shriram City Union Finance.