Private equity firm Multiples Alternate Asset Management Pvt. Ltd has hired an investment banker to initiate the process of selling its stake in Bangalore-based Vikram Hospital, a person privy to the development told VCCircle.
"Multiples has roped in Moelis and Co, which successfully oversaw Advent International’s stake in hospital chain CARE India Ltd to Dubai-based Abraaj Group early in January," the person said.
The private equity firm is looking to sell its stake at Rs 450 crore, the person said.
Email queries sent to Multiples and Moelis did not elicit any response till the filing of this report.
Mint first reported the development.
Multiples, which is led by former ICICI Venture CEO Renuka Ramnath, had bought a majority stake in Vikram Hospital in 2013 for nearly Rs 180-190 crore. The deal involved primary and secondary components wherein it bought ICICI Venture Funds Management Inc’s 64% stake besides making capital infusion into the hospital.
Vikram Hospital, which was founded in 2009, has 225 beds and offers cardiology, neurology, nephrology, urology, gastroenterology and hepatobiliary, bariatric and metabolic surgery, spine surgery, orthopaedics and trauma care services.
The hospital clocked revenues of Rs 97.50 crore in the financial year ended March 31, 2015 against Rs 81.46 crore in the previous year, according to VCCEdge, the data research platform of VCCircle based on the filings with Registrar of Companies (RoC). The hospital's operating profit had dropped to Rs 4.33 crore in FY2014-5 from Rs 5.23 crore in FY2013-14, the year it achieved operational breakeven.
Regional hospitals have been seeing a lot of private equity transactions recently.
In January, Abraaj Group agreed to acquire a majority stake in Hyderabad-based multi-specialty hospital chain CARE Hospitals from PE firm Advent International.
Abraaj didn’t disclose financial details of the transaction but people privy to the development had told VCCircle the deal was struck at an enterprise value of about Rs 1,800 crore ($270 million) for Quality Care India Ltd, which runs CARE Hospitals.
Other private equity-backed regional hospitals include Hyderabad Rainbow Children's Medicare Pvt. Ltd, Kolkata-headquartered hospital chain Medica Synergie Pvt. Ltd.
Multiples exits
The exit from Vikram Hospital will be Multiples third from its Fund I, which made investments in 11 companies and has been fully invested. Vikram Hospital was the only healthcare company where it put its money in.
It made its first full exit activity by selling its remaining 3.67 per cent stake in its two-year-old investment in South Indian Bank for Rs 151 crore ($23.8 million) in January 2015.
It has also exited from Murugappa group's financial services firm Cholamandalam.
Multiples had raised its maiden $405 million fund in 2011 wherein Canada Pension Plan Investment Board (CPPIB), Dutch pension fund PGGM, UK’s CDC Group and pension and sovereign funds from Europe and West Asia were the anchor investors.
Multiples' current portfolio includes multiplex firm PVR, e-tailing focused logistics company Delhivery, textiles major Arvind and Indian Energy Exchange.
Multiples is now looking to raise a total of $550-600 million in its second outing, as per a disclosure by World Bank's private investment arm International Finance Corporation (IFC). IFC has proposed to put in $40.6 million (Rs 270 crore) in the Indian private equity firm's second fund.
If it is successful, Multiples will cross the $1 billion assets under management (AUM) mark, coupled with the assets under its first fund.
Many other India-focused PE firms are on the road to raise new funds. CX Partners is looking to raise $400 million; Asian Healthcare Fund is eyeing up to $150 million in a sector-focused fund and Sabre Capital is raising around $45 million in a new healthcare-focused fund.
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