Transaction:

  • Global Investment firm KKR announced to acquire controlling stake of 70% stake in Birth Memorial Hospital. As per Media reports, KKR invested Rs. 2000 to Rs. 2500 Crore, valuing the hospital chain at Rs. 2500 to Rs. 3000 Crores.
  • KKR made the investment from its Asian Fund IV which will lead to primary infusion into the company to fund its growth plans as well as a secondary investment to dilute the current promoters who will be operationally running the company.

 

About Baby Memorial Hospital (BMH):

  • Founded in 1987 by Dr. K G Alexander, BMH is multi-specialty hospital chain in Kerala with a capacity of 1,000 beds across hospitals in Calicut and Kannur.
  • The hospital chain offers services in 40 medical and surgical departments, including cardiology, oncology, neurology, gastroenterology, paediatric, and orthopaedic care.
  • It currently has more than 2000 nursing, paramedical and administrative staff and 300 + doctors.
  • BMH also runs post graduate DNB courses for doctors, The Baby Memorial School of Nursing and the College of Nursing which offer Diploma in General Nursing & Midwifery, B.Sc. and M.Sc. in Nursing, under the Indian and Kerala Nursing Councils and University.

 

About KKR:

  • Established in 1976, the firm sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds.
  • Their portfolio investments in healthcare sector include Healthium, Infinx, JB Chemicals & Pharma, Gland Pharma, Bushu Pharma and Metro Pacific hospitals.

 

Rationale:

  • The investment will help the hospital chain’s pan-India expansion and medical infrastructures.
  • The plan is to expand the hospital network through both organic and inorganic growth strategies.
  • The new funding will support BMH’s efforts to address the growing need for quality, accessible healthcare services across India.
  • PE Fund’s network and deep healthcare expertise will help BMH in delivering greater impact and excellence in services to patients with a handful of global and local experiences.
  • During financial year 2024, BMH reported Rs 120 crore revenue and an EBITDA of Rs 80 crore.
  • In 2019, KKR had given a debt of Rs200 crore to BMH to meet its expansion plans.
  • This deal marks second investment in Indian hospital sector for KKR, having exited hospital chain Max Healthcare in 2022 with return close to five times its initial investment.
  • The healthcare sector in India is experiencing robust growth in the last couple of years with PE led consolidation deals like, Blackstone completing a $1 billion acquisition of Care Hospitals and KIMS Health, Temasek securing a controlling stake in Manipal Hospitals, while Swedish buyout firm EQT acquiring Indira IVF amongst others.
  • Healthcare sector of India should continue to see momentum as it is estimated that India’s healthcare sector needs to add 3.6 million beds, 3 million doctors and 6 million nurses with an investment outlay of $ 245 billion over the next 20 years.

Acknowledgements: 

RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)

Disclaimer:

This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.

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