TPG invests $146M in Manipal Health for a significant minority stake

Manipal Health Enterprises Ltd (MHEL), the healthcare arm of Manipal Group, has completed a transaction to raise Rs 900 crore ($146 million) from private equity firm TPG , as per a company statement.

Although the stake picked by TPG stands undisclosed, as first reported by VCCircle last month it is around 24.75 per cent.

Manipal provides healthcare services in India and part of the Manipal Education and Medical Group (Manipal Group), a privately held conglomerate focused on education, healthcare and research. It owns and operates ten multi-specialty hospitals in the Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu and Goa and also manages five teaching hospitals in Karnataka and Sikkim, as well as several fertility clinics across the country.

It also owns and operates a hospital in Malaysia and manages a clinic in Nigeria.

Ranjan Pai, CEO and MD of the Manipal Group said, “This investment allows MHEPL to access TPG’s operational know-how and international experience while strengthening our financial position, which allows us to uphold an unwavering focus on better patient outcomes.”

Puneet Bhatia, partner and TPG Capital’s head for India said, “In MHEPL, we have identified a business with extensive global experience and expertise in healthcare, a sector supported by robust growth drivers and with a critical role to play for social advancement in India.”

MHEPL and TPG have been jointly advised by Allegro Capital Advisors in the deal.

TPG has also received financial advice from Kotak Mahindra Capital Company and legal advice from AZB & Partners and Cleary Gottlieb Steen & Hamilton LLP. Tatva Legal provided legal advice to MHEPL.

Manipal has been scaling up with a mix of organic expansion and acquisitions to move into new geographies. With around 5,500 beds under management, it is among the top-tier hospital chain operators in the country.

The firm has also attracted a clutch of PE firms namely India Value Fund Advisors, IDFC Alternatives and Kotak Private Equity to bankroll its business plans. Early last year it roped in Ajay Bakshi from Max Healthcare as managing director & CEO.

TPG has two separate teams operating in India. TPG Capital, investing through its Asia and global buyout fund, is led by Puneet Bhatia. TPG Capital looks at large buyouts and strategic transactions. In another large deal few months ago it picked a large stake in Sutherland Global.

The other unit is under TPG Growth, which is led by Vish Narain. TPG Growth has invested in companies like Sutures India, paper packaging company Flexituff International, application software company AGS Transact and real estate development company Shriram Properties, among others. Most recently, early this month, TPG backed eyewear e-tailer Lenskart.

Hospital firms have been a hotbed of PE activity. Most recently Temasek acquired a stake in Medanta. Some hospital chains are also queueing up for IPOs.