Fortis Healthcare Ltd, the hospital chain controlled by Malaysia’s IHH Healthcare, will sell its Chennai facility to MGM Healthcare Pvt Ltd, helping the latter expand its presence in the city.
Mumbai-listed Fortis Healthcare will sell Fortis Malar Hospital Ltd for Rs 128 crore ($15.4 million). The transaction will be completed by the end of January 2024, the company said.
With this transaction, Fortis Healthcare will divest its 62.7% stake in Fortis Malar, which is also listed on stock exchanges, along with its outpatient department and radiology businesses. This includes the land and building on which the hospital is situated, and other adjacent land parcels belonging to the 140-bed facility.
The divestment is part of Fortis’ portfolio rationalization strategy to focus on deepening its presence in select geographic clusters where it has a substantial presence.
The deal comes after Fortis Healthcare sold its Vadapalani facility in Chennai in July 2023 to Lightrock- and 360 One-backed Kauvery Hospital Group for about Rs 152 crore (about $18.5 million then). Fortis in April also acquired Medeor Hospital, located in Manesar, Haryana, from the VPS Group for about Rs 225 crore (about $27.4 million then).
“The proposed divestment of the Fortis Malar facility underpins our focus on optimizing the current portfolio of our hospital assets with a view to prioritize our growth and expansion in other key markets and re-allocate capital judiciously,” said Dr. Ashutosh Raghuvanshi, managing director and chief executive of Fortis Healthcare.
“This is our second underperforming asset divestment in the last two quarters and emphasizes our resolve to improve our overall profitability and margins in the hospital segment,” he said.
Veda Corporate Advisors advised Fortis Healthcare on the deal.
