Private equity firm KKR said Monday it has struck a deal to acquire a majority stake in a south India hospital, two years after making a blockbuster exit from north Indian hospital chain Max Healthcare.
KKR's announcement to take control of Kerala-based Baby Memorial Hospital (BMH), its third healthcare-related deal in India this year, comes days after VCCircle exclusively reported that the PE firm would buy the hospital as part of a broader strategy to build a platform for hospitals in India.
KKR said in a statement that its investment will support Baby Memorial to build a pan-India network of hospitals, both through organic and inorganic routes. It didn't disclose financial terms of the transaction. However, a person tracking the transaction said the PE firm likely picked up a stake of around 70% for as much as Rs 2,000 crore ($240 million).
People tracking the development had told VCCircle last week that the asset manager was likely to infuse over Rs 1,000 crore as initial commitment and would double down as and when inorganic opportunities come up.
The PE firm routed the transaction through its Asian Fund IV.
"Our investment in BMH reflects our continued thematic focus on healthcare in India. We look forward to drawing from KKR’s network and deep healthcare expertise to take BMH to its next phase of growth and deliver greater impact to its communities," said Akshay Tanna, partner and head of India private equity, KKR.
Founded in 1987 by Dr. K G Alexander, BMH is one of the leading multi-specialty hospital chains in Kerala, with a capacity of 1,000 beds across hospitals in Calicut and Kannur, and planned expansions across the region.
BMH provides comprehensive services with specialized treatment across 40 medical and surgical departments, including cardiology, oncology, neurology, gastroenterology, pediatric and orthopedic care.
The company reported net sales of Rs 319 crore during fiscal year 2022-23, up from Rs 275 crore the year before. The company's EBITDA (earnings before interest, taxes, depreciation, and amortization) rose to Rs 56 crore, from Rs 46 crore in 2021-22, as per VCCEdge, the data intelligence platform of VCCircle.
KKR had earlier this year acquired a significant minority stake in Infinx Services Pvt Ltd, an AI-driven healthcare revenue cycle software provider, and bought medical devices maker Healthium Medtech Ltd.
KKR's renewed interest in the space comes two years after it wrapped up its biggest exit in the country by selling its stake in Max Healthcare Institute Ltd for almost $2 billion.
The KKR deal comes at a time when the healthcare sector is already witnessing big-ticket cheques being written by some of the largest global funds.
For instance, Blackstone, the world’s biggest PE firm, last year struck a $1 billion deal to acquire Care Hospitals and KIMS Health. Singapore state investment firm Temasek last year took a controlling stake in Manipal Hospitals while Swedish buyout firm EQT bought Indira IVF. Earlier this year, General Atlantic acquired hospital chain Ujala Cygnus.
