KKR, Baring, Temasek in race to buy stake in Manipal

INDIA – Buyout giants including KKR & Co, Baring Private Equity Asia, and Singaporean sovereign fund Temasek Holdings, an existing investor, are in talks to buy a 21.5 percent stake in Manipal Hospitals, Economic Times has reported.

Existing investor TPG Capital Management is looking to encash a seven-year-old investment said people aware of the negotiations.

The fresh round of talks with global buyout giants was initiated after the Texas-based private equity fund’s attempts to sell the shares back to Manipal’s Pai family didn’t bear fruit.

Temasek already owns an 18 percent stake in Manipal Hospitals while National Infrastructure Investment Fund (NIIF) holds 8 percent. The remaining 52.5 percent is held by the Pai family.

The proposed transaction is expected to value the hospital chain at ₹30,000-32,000 crore (US$4 billion), said one of the persons privy to the negotiations.  

The proposed transaction will be a precursor to Manipal’s proposed public issue, which is expected in 2023-24.

TPG invested US$146 million in Manipal in 2015 and, based on the estimate above, the US private equity (PE) firm could generate more than 5x return on the investment.

The Economic Times said KKR, Manipal, TPG, and Temasek declined to comment while Baring PE Asia did not respond to queries.

Earlier in July, the Pai family was seeking US$400-500 million as part of its plan to buy back the shares held by TPG.

TPG is also in talks to exit its investment in Care Hospitals. In a September 13 report, The Economic Times reported that Blackstone, CVC Capital, Brookfield, Temasek, and Max Healthcare are in a bidding war for Care Hospitals.

Additionally, TPG owns Motherhood Hospitals, India’s largest chain of mother and child hospitals, as well as Nova IVF, India’s largest chain of infertility clinics.

Manipal Hospitals was established in 1991 by the Pai family, which founded India’s first privately owned medical college in Manipal in Karnataka in 1953.

In November 2020, Manipal Hospitals acquired the Indian assets of Columbia Asia Hospitals for Rs 2,100 crore (US$263 million), and in June 2021 purchased Bengaluru-based Vikram Hospitals from private equity firm Multiples for Rs 350 crore (US$43.9 million).

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