In one of the largest private equity deals in healthcare sector in India, Government of Singapore Investment Corporation (GIC), the sovereign wealth fund of Singapore, has invested $100 million for a minority stake in Tamil Nadu headquartered eye care chain Vasan Healthcare. GIC will get a
board seat in the company.
GIC had earlier invested $100 million through FCCBs in Fortis, India's second-largest hospital company. These were converted into a 6.24 per cent stake last year. It was also planning to invest $84 million through a preferential share allotment which got dropped.
In the past, GIC has made PE investments in Hero MotoCorp (India's largest two-wheeler maker) , Ballarpur Paper (housing the commodity paper assets of country’s largest paper company
BILT) , Viom Networks (telecom tower major) and GVK Energy (power utility arm of GVK
Infrastructure).
According to A M Arun, Chairman of Vasan, the company will use the funds to expand into new geographies and also acquisitions.
Vasan had in 2009 raised around $22 million from Sequoia Capital and Westbridge Capital. The investors combined still hold a minority stake in the company. Reports also suggest that Vasan will now push its initial public offering planned this year to 2015 with this significant capital infusion. The company also has plans to expand overseas and into other verticals like infertility, skincare, urology and orthopaedics.
Spark Capital was advisor to the transaction.
Vasan had its origins as a pharmacy in 1947 in Trichy in Tamil Nadu, while it started its first eye care hospital in 2002, and ever since it has been expanding to reach 100 hospitals in 11 states now.
The year has started with robust dealmaking in healthcare sector by private equity firms, especially in value. Till date, calendar year 2012 has seen nine private equity deals worth $360 million as compared to 31 deals worth $392 million in the entire calendar year 2011, according to VCCEdge.
This has been driven up by large deals like Olympus Capital's $100 million infusion in DM Healthcare, a Kochi-based healthcare services provider with operations in India and the Middle East and $40 million investment in Pune-based specialty hospital chain Sahyadri.