Bangalore-based Manipal Hospitals has not made any acquisitions since 2013, and recently lost the bid for Fortis Healthcare, despite making multiple bids, to Singapore's IHH Healthcare. An acquisition is critical for Manipal to expand its footprint and grow.
It now operates 10 multispeciality hospitals across India and has bid for Delhi-based Medanta Hospitals. Backed by US-based private equity player TPG Capital, Manipal has reportedly made a binding offer of Rs 5800 crore for Medanta as its promoter (renowned cardiac surgeon Naresh Trehan) and investors are seeking exit. Trehan, his family members and co-founder Sunil Sachdevan own 55 per cent, while the rest is held by Carlyle Group (27 per cent) and Temasek (18 per cent).
The Rs 5,800 crore valuation will be an EBITDA multiple of about 24 times for Medanta which is estimated to have posted a Rs 240 crore Ebitda for FY19.
Medanta's strong presence in the North compliments Manipal's predominantly southern India presence.
Medanta's flagship super-speciality tertiary care hospital in Gurugram called Medicity has over 1500 bed capacity. It has smaller hospitals in Indore (about 120 bed) and Ranchi (175 bed), which it operates on lease. It also has upcoming projects in Lucknow, Noida and Patna. Post the exercise, Medanta's bedcount is set to double.
Manipal had entered the NCR market with a 380 bed hospital at Dwarka last year. The group operates a chain of multi-specialty hospitals with over 5,200 beds and has footprints across Bengaluru, Manipal, Mangalore, Vijayawada, Salem, Goa, and Jaipur, besides at Klang in Malaysia.
Together, Manipal and Medanta would have a bed count of around 7000-8000 beds once the ongoing expansion projects are completed. It will allow the Manipal investors to make an exit as the hospital grows in scale.