TPG and Temasek backed Manipal Hospitals is all set to sign a time-bound exclusivity agreement to acquire a controlling stake in Naresh Trehan's Medanta Hospitals in the next eight to ten days. Sources indicate that post due diligence (which is expected to complete in 90-days), Manipal and its investors would take a final call on the deal.
Market sources peg the deal size (for over 80 per cent stake in Global Health, which owns, manages and operates Medanta) to be around Rs 60 billion. "The due diligence is about to begin. Talks are in a preliminary stage. A time-bound exclusivity agreement is expected to be signed between the parties soon. If the due diligence is satisfactory, then the deal will go through within 90-days or so," said a source who did not wish to be quoted.
Interestingly, Singapore based investment company Temasek owns 18 per cent in both Global Health and Manipal. TPG owns around 22 per cent in Manipal Education and Medical Group. Both Temasek and TPG are expected to raise their stake in Manipal as they bring in money to fund the deal. The details of the deal structure are yet to be finalised.
However, sources claimed that private equity firm Carlyle (that owns around 27 per cent in Global Health) is likely to exit from the company through this deal. Cardiac surgeon Trehan, co-founder Sunil Sachdeva own about 55 per cent in Global Health.
Manipal owns and operates 10 multispeciality hospitals across India was in race to acquire Fortis Healthcare. After falling out of the race to acquire Fortis, Manipal had indicated that it would be scouting for hospital assets in the country. Medanta has a strong presence in the north, which compliments Manipal's predominantly southern India presence.