Posted by : Varun Doshi
On : 03 June 2014
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Views : 1803
Manipal Health Enterprises (MHE) is eyeing control of Mumbai-based Balabhai Nanavati Hospital marking the South-based healthcare chain's entry into India's financial capital, people involved with the transaction said.
Manipal plans to acquire the management rights of the 350-bed Nanavati Hospital in Vile Parle for over Rs 400 crore (68M $). The payout will cover Nanavati's existing debt, working capital, expansion plans and voluntary retirement scheme (VRS) for some of its 1,400 staff.
Bangalore-headquartered billionaire Ranjan Pai led-Manipal has been on the prowl for acquisitions to expand its geographical footprint in India and overseas. Last year, it acquired a 72-bed hospital in Kuala Lumpur, and snapped up a 280-bed hospital in Jaipur in February.
The owners of Nanavati had mandated investment bank Equirus Capital to explore strategic options last year. Manipal emerged as the frontrunner, pipping other suitors, including the IPO-bound Aster DM Healthcare. Last year, HealthCare Global Enterprises, backed by PremjiInvest and Temasek, had invested Rs 100 crore in a similar deal with Nanavati specifically for cancer care.
MHE's chairman Swaminathan Dhandapani said the company was looking at multiple opportunities for inorganic growth but he would not comment on speculation. Repeated calls to the office of Nanavati Hospital's chairman Priyam Jhaveri's office and an emailed query met with no response. When contacted, its chief operating officer Dr Ashok Hatolkar said he cannot comment on matters pertaining to owners and trustees of the hospital.
The latest acquisition will be structured differently since the 65-year-old Nanavati Hospital is run by a trust. There will be no exchange of shares and the deal will involve a long-term management takeover, a source cited earlier said, declining to divulge details since talks are still private.
Post the transaction, which is expected to close in a fortnight, the hospital will have a joint branding. Manipal's takeover of Nanavati is indicative of the trend of corporate healthcare groups making investments in hospitals run by trusts. In 2009, Fortis Healthcare took management control of Mumbai-based S L Raheja Hospital.