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Ascent Capital-backed hospital acquires Al Shifa

Enterprise valuation of Rs 300 crore makes this among the largest in Kerala

Raghuvir Badrinath  |  Bengaluru 

Kerala Institute of Medical Sciences (KIMS), backed by Bengaluru-based private equity fund Ascent Capital and Orbimed, has acquired a majority stake in Al Shifa Hospital for an enterprise value of Rs 300 crore, making this amongst the largest health care acquisitions in Kerala.

Al Shifa Hospital is a tertiary referral hospital set up in 1989, with a capacity of 75 beds, and was expanded to 600 beds over the years and is among the most prominent in the south Malabar region situated in the Ooty road at Perinthalmanna. The hospital has been primarily promoted by Unneen Puthanpura who is the CMD of the Al Shifa Group. Evren Asset Advisors was the sole adviser for the transaction.

One of the key levers for KIMS to acquire the private hospital lies in the fact that within a radius of 75 km to 100 km, no similar facility is available. Al Shifa recently added a new block of 300 beds, making it amongst the strong multi-specialty hospitals in the region.

This acquisition by KIMS comes even as the company is looking to aggressively expand its presence in the Southern Malabar region after establishing its presence in Kochi, Kollam, Kottayam and Thiruvananthapuram besides having multiple presence across West Asia,spanning Bahrain, Oman, Qatar, Saudi Arabia and Dubai with a capacity in excess of 2,000 beds.

This move by KIMS to expand its presence in this key market comes at a time when Dr Azad Moopen-promoted Aster DM Healthcare is also on an aggressive rollout plan across South India, including the South Malabar region at Perinthalmanna and at Kannur. Aster DM Healthcare is also backed strongly by global private equity major — Olympus Capital besides India-based PE fund India Value Fund Advisors.

The aspect of M&A and private equity fund raising has been on an upswing in 2014 with the total value of close to $40 billion. According to assurance, tax and advisory firm Grant Thornton, the overall deal sentiment in India has remained consistently high from the second quarter of 2014, surpassing the level of value and volume recorded during the past two years.

“We see the overall trend continuing in terms of the quantity of deals. We have seen some very interesting deals in the infrastructure and manufacturing sector amongst the corporate M&A, and we continue to see an uptick in the private equity and cross-border deals as we go along,” Grant Thornton India Partner Harish HV said.

With a 19 per cent increase in value and a 12 per cent increase in volume over 2013, the M&A sphere saw increased activity at $25 billion (by way of 373 deals).

“Clearly, domestic and inbound deal activity has contributed to this increase. Although the deal volume is consistent, outbound deal value is yet to match the levels seen previously,” Harish added.

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First Published: Mon, November 24 2014. 20:45 IST