To consolidate domestic & global operations into a Rs 4,500-crore company.
Fortis Healthcare will acquire its Singapore-based sister entity, Fortis Healthcare International Pte Ltd, to consolidate its domestic and global hospital operations into a Rs 4,500 crore ($1 billion) healthcare company, which would be Asia’s largest, with active presence in 10 countries.
The all-cash deal will be carried out on the basis of independent valuation by a yet-to-be-chosen agency, promoter brothers Malvinder Mohan Singh and Shivinder Mohan Singh said on Monday. The Fortis board has asked a panel of its independent directors to identify the agency.
The move was driven by "potential opportunities, potential synergies of being able to leverage the consolidated balance sheet, consolidated medical and business management capabilities and to grow in multiple markets", said Malvinder Singh, the group chairman.
| COMBINED FORTIS NETWORK | ||
| Company | Asset | Country |
| Fortis India | 66 hospital network, 190 diagnostic labs | India |
| Quality Healthcare | 580 primary care centres | Hong Kong |
| Fortis Speciality Hospital | Under construction | Singapore |
| Dental Corporation | 174 dental clinics | Australia, New Zealand |
| Lanka Hospitals Corporation | 30% stake | Sri Lanka |
| Hoan My Medical Corporation | 65% stake | Vietnam |
While the promoters own 80 per cent in India’s listed entity Fortis Healthcare, the Singapore firm, set up less than a year ago to drive the group’s international growth, is wholly-owned by the Singh family. The new shareholding pattern will be clear once the valuations are carried out.
Fortis’ international arm was set up last year to pursue the group’s overseas business after losing out to Malaysian state investor Khazanah in a battle for Singapore's Parkway Holdings, then Asia's biggest listed hospital operator. Fortis International has made seven acquisitions in the last nine months to build a healthcare chain across verticals in Hong Kong, Australia, New Zealand, Singapore, Vietnam, UAE and Sri Lanka.
This is the second related party transaction for the Singh brothers after Fortis Healthcare acquired the family-owned diagnostic chain, Super Religare Laboratories, recently. Under the new structure, Fortis Managing Director Shivinder Mohan Singh will become executive vice-chairman of the consolidated Fortis Group, while Malvinder Singh will become its executive chairman.
Terming the new entity as India’s first “healthcare multinational corporation”, the promoters said they plan to invest
$1 billion to propel the company’s growth in the next two to three years.
Addressing a press conference here, the promoters said the company will not have any problem in raising sufficient funds needed for the acquisition. They hoped to conclude the transaction by December-end.
After consolidation, the Fortis network will be spread over 74 hospitals with a combined capacity of 12,000 beds across 10 countries. It will also have 580 primary care centres, 188 day care speciality centres, 190 diagnostic centres and a 23,000 employees.
With 66 hospitals and 190 diagnostic labs across India, Fortis India on Monday accounts for almost half of the $1 billion turnover projected for the combined entity. The company also named Vishal Bali, who headed the international business as the global CEO of Fortis Healthcare. The Indian operations will be headed by Aditya Vij, as CEO, while the international business will be headed from Singapore by Eng Aik Meng.
Fortis Healthcare shares closed marginally lower on the Bombay Stock Exchange at Rs 144.3 a share on Monday.
