TPG targets 40% ownership stake in Dr Agarwal’s Health Care

INDIA – TPG Capital, a global private equity firm, is in advanced talks to acquire a significant minority stake in Dr Agarwal’s Health Care Limited, which owns India’s largest chain of eye care hospitals, Dr Agarwals Eye Hospital.

As per the deal, TPG will likely acquire a 40 percent stake in Dr. Agarwal’s Health Care, in addition to a 32 percent stake held by current investor ADV Partners and additional major capital deployment.

The deal which is said to be worth approximately $300 million (Rs. 2,200 crore) will be funded by the PE firm’s progress fairness platform TPG Growth.

The transaction is being advised by Chennai-based funding financial institution Veda Corporate Advisors.

Private equity firms General Atlantic and Goldman Sachs were also in the race for the attention hospital chain.

Temasek Holdings, a Singaporean state-owned investment firm, owns approximately 22% of Dr. Agarwal’s Health Care.

The promoter group Dr Agarwal household currently owns approximately 45 percent of the company.

Temasek also invested in TPG’s Asia Healthcare Holdings last year, which is also focused on single-specialty hospitals.

Temasek’s healthcare investments in India include Manipal Health Enterprise Pvt. Ltd, a multi-specialty hospital, and Healthcare Global Enterprises, an oncology chain.

Dr Agarwals Eye Hospital acquired Mumbai-based Aditya Jyot Eye Hospital last month to expand into Maharashtra.

The chain intends to invest US$ 133.14 million (Rs 1,000 crore) to expand its footprint across India to 200 hospitals, as well as approximately US$40 million (Rs 300 crore) in Maharashtra to establish 20 eye hospitals across the state over the next three years.

ADV Partners (ADV), a Hong Kong-based private equity firm, invested around US$45 million (305 crore) in Dr. Agarwal’s in 2016, purchasing the stake held by current investor Evolvence India.

In other news, Manipal Hospitals is in advanced talks to buy Emami Group-owned AMRI (Advanced Medical Research Institute) Hospitals for US$146.5 million (Rs 1,100 crore), according to Business Standard.

This comes as Kolkata-based Emami reopened talks after discussions with suitors such as Global Hospitals and Narayana Health fell through three years ago.

Manipal Hospitals COO Karthik Rajagopal indicated that it is looking at both the options of a complete takeover of 1,300-bed Amri hospitals or acquiring some of its assets.

If the takeover materialises, it would make Manipal an inch closer to healthcare leader Apollo. Rajagopal said that with over 7,600 beds, Manipal is the second largest hospital player now. So, acquiring another 1,300-1,400 beds would take it in the striking distance of Apollo.

Meanwhile, in June Manipal had bought Vikram Hospitals in Bengaluru for USD$ 47.9 million. The hospital which is working to expand its operation in Eastern India also acquired Columbia Asia Hospitals in April this year for about US$ 300 million.

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