PE major Blackstone in race for majority pie in Omega Healthcare

Valuation likely at $1.7 bn; Goldman Sachs, Everstone Capital looking to exit

American private-equity major Blackstone has joined the race to buy Omega Healthcare, a technology-enabled service provider, at an estimated valuation of $1.7 billion.

Omega Healthcare, which has 27,000 employees on its roll, is majority-owned by Goldman Sachs Asset Management and Everstone Capital, which are looking for an exit, said a source close to the development.
 

Blackstone, Goldman Sachs, Everstone, and Omega Healthcare declined to comment on the impending sale.
 

Omega Healthcare was founded by Gopi Natarajan and Anurag Mehta in 2003 in the United States (US) to provide outsourcing services to the health care services sector worldwide. Since then, the company has grown across the world with operations in the US, India, and the Philippines. A majority of its employees are based in India.

 

Blackstone, which has invested $50 billion in India so far, has identified health care, technology, real estate, and infrastructure for further investment. The private-equity firm is planning to inject an additional $25 billion in India in the years ahead, with $2 billion planned every year. Top officials of Blackstone, which is sitting on $200 billion of dry powder, have said Indian private-equity investment has delivered the highest return for Blackstone worldwide and the country has emerged among the top three investment destinations — after the US and UK — and is on the lookout for more deals. In commercial real estate, Blackstone is now India’s largest commercial landlord.

The source said apart from Blackstone, there were other suitors likely to join the race for Omega and some existing investors might retain part of their stake.

Health care and related sectors are witnessing a lot of investment from global private-equity firms in the recent months.

On May 6, KKR & Co, the New York-based private-equity firm, said it would buy Bengaluru-based medical devices company Healthium MedTech from an affiliate of funds advised by private-equity firm Apax Partners. According to sources, the deal was valued at Rs 6,500-7,000 crore.

On April 26, Apollo HealthCo, a subsidiary of Apollo Hospitals Enterprise, announced plans to raise equity capital of Rs 2,475 crore from Advent International, one of the world’s largest private-equity investors.

On Blackstone’s top targets for investment in the coming years, Jonathan Gray, president and chief operating officer, recently said health care, logistics, data centres, and hotels, apart from value-added exporters and consumer centric businesses, looked attractive for the fund.

“This rising middle-class phenomenon, which could be health care and financial services, could be related to travel. All of that, I think, has a lot of runway. An energy transition to another area that is globally big, obviously, is going to be important for India,” he said.

With inputs from Anjali Singh