Singapore state-owned investment company Temasek Holdings is in the final stages of discussions to acquire a minority stake in Asia Healthcare Holdings, a healthcare platform set up by US-based private equity fund TPG Growth, for $100 million, two people aware of the development said. Temasek plans to buy an around 30-35% stake in Asia Healthcare, valuing it at $300 million.
Set up in 2017, Asia Healthcare holds TPG Growth’s investments in Bengaluru-based Rhea Healthcare, which operates mother-and-childcare centres under the Motherhood brand; and Cancer Treatment Services International, a network of single-speciality facilities across the country. Asia Healthcare is led by Vishal Bali, Asia head of healthcare at TPG Growth and former CEO at Fortis Healthcare and Wockhardt Hospitals. The funds from the stake sale will be used for growth capital.
While discussions are ongoing with a number of PE investors like Temasek, Warburg Pincus and some global pension funds, those with Temasek are in an advanced stage, said one of the people. Kotak Investment Bank is advising TPG to dilute its stake in the platform.
Spokespeople for TPG Growth and Temasek declined to comment. Temasek has been one of the aggressive investors in the Indian healthcare industry.
The Singapore fund already owns minority stakes in leading hospital chains in India such as Ranjan Pai-owned Manipal Hospitals, Medanta-The Medicity owned by cardiac surgeon Naresh Trehan and Bengaluru-based cancer care hospital chain HealthCare Global Enterprises Ltd.
Temasek in final talks to acquire 30-35% stake in AHH for $100 m In last year, it acquired an 18% stake in Manipal Health Enterprises from PE fund True North.
Temasek, which holds 18% in Medanta, plans to increase it to a controlling stake. US-based private equity fund Carlyle Group owns 27% of Medanta, while Trehan, his family and co founder Sunil Sachdeva own the rest. Temasek was also one among the contenders to acquire a significant minority stake in Kerala Institute of Medical Sciences, and a controlling stake in Hyderabad based CARE Hospital.
For the last couple of years, global PE funds have been active in the Indian hospital space through newly created or existing platforms and expanding by acquiring more assets.
Last year, US PE fund KKR & Co acquired a 49% stake in Radiant Life Care for $200 million. Radiant’s facilities include BLK Super Speciality Hospital in New Delhi and the Nanavati Super Speciality Hospital in Mumbai. Currently, the Radiant-KKR platform is looking for stakes in more hospital assets including Fortis Healthcare and Max Healthcare.
The huge demand-supply gap in healthcare sector in India makes the space attractive for global funds. According to a report last year by PricewaterhouseCoopers, the healthcare delivery system in India will require an investment of around $245 billion by 2034. According to the report, India needs to add 3.6 million beds, 3 million doctors and 6 million nurses over the next 20 years. At present, there are only 1.1 hospital beds, 0.7 doctor and 1.3 nurses per 1,000 people in the country.