Goldman Sachs, NEA to invest $54M in Nova Medical Centers

Bangalore-based ambulatory surgical group Nova Medical Centres has secured an equity investment of Rs 300 crore ($54 million) from Goldman Sachs and New Enterprise Associates (NEA). Goldman Sachs will put in Rs. 220 crore ($40 million), while NEA, its existing investor, will make an additional investment of Rs 80 crore ($14 million). The funds will be used to further expand Nova’s specialty surgery and fertility businesses.

Founded in 2009 by New York-based private equity firm GTI Group and Dr Mahesh Reddy, Nova develops, acquires, owns and operates day/short-stay surgical centers in partnership with surgeons across India and the Middle East. The company pioneered the concept of short-stay surgical care in India and undertakes procedures that take 24-72 hours from admission to discharge. It provides more than 700 surgical procedures, including specialties in orthopaedics, spine surgery, general surgery, gynaecology, bariatric surgery, ENT, plastic & cosmetic surgery, urology, gastroenterology, ophthalmology, pain management and IVF.

In August 2011, Nova acquired a majority stake in Pulse Women's Hospital, an IVF clinic based in Ahmedabad, for an undisclosed amount. It also bought Chennai-based Helios Hospitals in February this year.

Currently, Nova has nine centres across Bangalore, Chennai, Mumbai, Jaipur and New Delhi. In its initial years, it raised $3.5 million (Rs 19.32 crore) from GTI, followed by further investments by NEA and GTI. This was further enhanced by a joint venture with IVI, Spain, a leader in IVF technology.

Suresh Soni, Chairman and CEO, Nova Medical Centers, said, “This investment from Goldman Sachs and NEA will accelerate the expansion of Nova’s footprint across the country both organically as well as through acquisitions.”

Ankur Sahu, co-head of private equity in Asia at Goldman Sachs, said, “This investment is consistent with our strategy to partner with experienced management teams and owners to build high quality businesses of scale in under-served sectors critical to India's growth.” Ankur Sahu and Harsh Nanda, Executive Director at Goldman Sachs, will join the Board of Nova.

“Healthcare has always been a major focus for NEA globally and in India,” said Ben Mathias, Executive Director of New Enterprise Associates (India) Pvt. Ltd. “Backing healthcare services platforms that improve quality, increase access and reduce costs is a proven strategy for us.”

Goldman Sachs is active in private equity and principal investing in India. Since 2006, the firm has deployed more than $2 billion in India. Globally, Goldman Sachs has invested over $8 billion in the healthcare sector spread across more than 30 companies, including Quorum, Drayer Physical Therapy and Max India.

Bangalore-based NEA has invested $15 million in Nova. NEA had in July closed a $2.6 billion fund, its 14th and one of the largest raised in venture capital. The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.

In a similar deal, India Value Fund Advisors (IVFA) committed up to Rs 1,000 crore to Manipal Hospitals in August this year in August this year).

(Edited by Prem Udayabhanu)