Private equity firm TPG Growth has agreed to sell Cancer Treatment Services International to New York-listed Varian Medical Systems Inc. for $283 million (Rs 1,974 crore), barely three years after buying the oncology chain.
The mid-market and growth-equity platform of alternative asset firm TPG said in a statement that the sale marks the first exit of Asia Healthcare Holdings (AHH), a healthcare investment platform that it had founded in 2017 and that housed CTSI.
The transaction is likely to close in two weeks' time and is subject to customary closing conditions, TPG Growth said.
CTSI owns and operates a network of cancer treatment facilities under the brand American Oncology Institute across India and South Asia.
TPG Growth had taken a majority stake in CTSI in 2016, reportedly for $33 million. A few months later, the PE firm also invested in Rhea Healthcare Pvt. Ltd, which runs a chain of mother- and child-care hospitals under the brand Motherhood, for a significant majority stake. These two companies were put under Asia Healthcare the next year.
"The genesis of AHH was to build single-specialty healthcare delivery businesses. Leveraging TPG’s global healthcare franchise, we worked together to grow CTSI from sourcing to exit," said Vishal Bali, CEO at Asia Healthcare.
CTSI had only one facility, in Hyderabad, when TPG Growth invested in the company. It now has 11 cancer hospitals while six more are in the pipeline.
In a separate statement, Varian said CTSI clocked revenue of $43.5 million for the fiscal year through March 2019.
The Palo Alto, California-based company said the acquisition is likely to boost its expertise in cancer centre operations and expand the geographic reach of CTSI’s technology-enabled clinical solutions.
TPG's healthcare deals
TPG has invested $14 billion of equity capital in the healthcare sector across the world. Of this, 20% has been invested outside the US.
Earlier this month, Asia Healthcare Holdings struck its third India bet by investing in fertility clinics chain Nova IVI Fertility Pvt. Ltd.
TPG Growth had previously invested directly in medical devices maker Healthium MedTech (formerly Sutures India), which it sold to Apax Partners last year. Its parent TPG has a stake in hospital chain Manipal Hospitals.
Its other healthcare investments outside the US include Parkway Holdings (Singapore), Healthscope (Australia), Asiri Health (Sri Lanka) and United Family Healthcare (China).
