Malaysia’s IHH Healthcare Berhad may acquire Global Hospitals in Rs 1,000-cr deal

MUMBAI: Malaysian giant IHH Healthcare Berhad is set to acquire Global Hospitals Group, India's fourth largest healthcare network, in one of the biggest M&A deals in the sector. IHH, the world's second largest healthcare service provider by market value, is expected to scoop about 60 per cent stake for an estimated $170 million, or around Rs 1,000 crore, people directly familiar with the matter told TOI.

The impending transaction values the Hyderabad-based healthcare chain, founded by a group of medical professionals led by Dr K Ravindranath 12 years ago, at over Rs 2,000 crore, including the company's debt. IHH is likely to acquire stake from existing financial investors — Everstone Capital with a 35 per cent stake and portfolio investors of Anand Rathi with 10 per cent — and pump fresh equity into the company.

Global Hospitals operates in Mumbai, Chennai, Bangalore and Hyderabad with over 2,100 beds currently. "The transaction is almost done with some final issues being discussed currently. It could go through in the next three weeks or so," one of the sources cited above said.

"We are looking at various value-accretive opportunities. However, it is not appropriate for us to comment on specific transactions and we will update the market if there are any material developments," an IHH spokesperson said in an emailed response to TOI. Calls and messages sent to Dr Ravindranath remained unanswered till the time of going to press.

This will be IHH's biggest deal in India where healthcare spending is poised for robust growth on the back of rising income and changing lifestyles. Last month, it acquired Continental Hospital, a 750-bed super specialty asset, for Rs 280 crore.

Kuala Lumpur-based IHH owns Singapore's Parkway, Mount Elizabeth and Gleneagles hospitals and is considered to be Asia's largest vertically integrated healthcare chain, listed on Bursa Malaysia and SGX. Malaysia's sovereign wealth fund Khazanah Nasional Berhad is the majority owner of IHH, with a footprint extending from Turkey to Vietnam. IHH owns around 10.5 per cent stake in India's largest private healthcare provider Apollo Hospitals. Sector analysts are keenly watching how the ties between the two would evolve in the context of IHH's bigger ambitions in the country. In fact, the two partners operate joint venture facilities with the latter in Kolkata and in Hyderabad.