US-based private equity firm General Atlantic will acquire “a significant majority” stake in regional hospital chain Ujala Cygnus, as buyout firms continue to buy Indian healthcare companies.
The deal will also provide a full exit to Ujala's early investors Eight Roads Ventures, Somerset Indus Capital, and Evolvence Capital, according to a press release.
The development comes more than eight months after VCCircle first reported that General Atlantic was in talks to invest in Ujala.
The PE firm and the hospital chain didn't disclose any financial terms of the transaction. However, VCCircle reported last year that a deal could value Ujala up to Rs 1,800 crore. Separately, The Economic Times, citing sources, reported Wednesday that the deal was valued at Rs 1,600 crore.
India has recorded several hospital deals in the recent past after the Covid-19 pandemic highlighted the acute need for good healthcare infrastructure. Singapore state investment firm Temasek last year invested $2 billion to increase its stake in Manipal Hospitals. Blackstone, the world's biggest PE firm, stitched a $1-billion deal to acquire CARE Hospitals and Kerala's KIMS Health while Swedish PE firm EQT inked a similar-sized deal to buy Indira IVF. General Atlantic, which boasts of $83 billion in assets under management, itself led a $188-million investment in eye-care chain ASG Hospital in 2022.
While the primary fund infusion, if any, and secondaries were not disclosed, Ujala Cygnus said it plans to use the investment from General Atlantic to upgrade clinical and civil infrastructure across the network and to augment comprehensive care capabilities.
“With a commitment to further extend impact in underserved markets, Ujala Cygnus aims to pursue both organic and inorganic growth strategies, including collaborations with local hospitals through leasing and revenue-sharing models,” said Probal Ghosal, chairman and director at Ujala Cygnus.
In addition to the investment from General Atlantic, Ujala Cygnus recently secured term loan facilities from Asian Development Bank. EY India was the financial advisor on this transaction.
Founded in 2011, Cygnus operates 18 hospitals across 15 Tier-II and Tier-III cities in Haryana, Uttar Pradesh, Uttarakhand, Jammu and Kashmir, and Delhi. The hospital chain offers services across more than 30 verticals such as nephrology, oncology, urology, gastroenterology, orthopaedics, and reconstructive surgery.
In November 2019, Eight Roads Ventures and Somerset Indus had made partial exits when media group Amar Ujala picked up a majority stake in the company.