Max to acquire 64% stake in Jaypee Healthcare at Rs 1,660 cr valuation

Max Healthcare Institute on Friday said it will acquire 64 per cent stake in struggling Jaypee Healthcare for an enterprise value of Rs 1,660 crore.

The company has entered into a strategic agreement with Lakshdeep Group, the promoter of Jaypee Healthcare Ltd (JHL) which is undergoing Corporate Insolvency Resolution Process (CIRP), Max Healthcare said in a regulatory filing.

The collaboration and proposed acquisition will give Max Healthcare a controlling stake in JHL, including its flagship asset, the 500-bed Jaypee Hospital in Noida, it added.

Under the agreement, Max shall organise debt for repayment of admitted claims of the financial creditors of JHL and proposes to simultaneously acquire 64 per cent stake in the company, with call and put option for the remaining stake, it said.

The acquisition is based on an enterprise value of Rs 1,660 crore, reflecting JHL's strong market position, which includes two operational hospitals -- 500-bed Jaypee Hospital, Noida and 200-bed Jaypee Hospital in Bulandshahr, built on land parcel of 18 acre and 5.75 acre, respectively, it added.

JHL also owns a 100-bed hospital spread over 2.35 acre at Anoopshahar, which is currently non-operational.

JHL reported revenue of Rs 421 crore and EBITDA of Rs 70 crore for the year 2023-24.

"Addition of JHL to the network is an important milestone in our journey to build a formidable presence in NCR- a region which is not only home to 46 million people but also plays a pivotal role in shaping the Indian economy as an economic hub," Max Healthcare Institute Chairman and Managing Director Abhay Soi said.

Max Healthcare remains focused on formulating a comprehensive strategy that addresses the demands of all stakeholders involved while prioritising the delivery of quality healthcare services in a sustainable manner and potentially expand the flagship Noida facility to 1,200 beds over the next few years, he added.

The transaction, which includes the strategic collaboration agreement and the acquisition of JHL's stake held by financial creditors, shall be consummated in next 30 days in line with the revival plan approved by National Company Law Appellate Tribunal (NCLAT), he said.

The revival plan is designed to provide sustainability to the operations of Jaypee Hospitals through appropriate measures to enhance operational efficiency while building confidence among various stakeholders, he added.

Shares of Max Healthcare Institute on Friday were trading 0.21 per cent up at Rs 914.50 apiece on BSE.