Malaysia's IHH buys 73.4% stake in Global Hospitals for Rs1,284 cr
29 August 2015
Malaysian group Healthcare Berhad (IHH Healthcare) today announced the signing of an agreement to acquire a 73.4 per cent stake in India-based Ravindranath GE Medical Associates Private Limited (Global Hospitals) for Rs1,284 crore (RM819 million).
On completion of the acquisition, which is being made through its indirect wholly-owned subsidiary, Gleneagles Development Private Limited (GDPL), IHH will own 73.4 per cent in Global Hospitals on fully diluted basis, IHH said in a statement.
As part of this transaction, IHH will use Rs265 crore (RM169 million) to fund the hospital chain's capex requirements and to optimise its current cost of borrowing.
Global Hospitals is among the leading private hospital chains in India. It has a track record in delivering multi-specialty tertiary and quaternary care, particularly in multi-organ transplants, hepatobiliary diseases and gastroenterology.
Founded in 1999, Global Hospitals operates a chain of five hospitals (supported by three feeder centers) with approximately 1,100 operational beds in Hyderabad, Bangalore, Chennai and Mumbai.
The number of operational beds is expected to ramp up to approximately 1,900 beds within the next 5 years.
To better leverage brand equity and coordinate branding efforts, IHH plans to consolidate all of Global Hospitals facilities under IHH's `Gleneagles' brand.
''This will be a game-changer for IHH in India. Together with our existing hospitals, the acquisition of Global Hospitals catapults us towards becoming one of the leading hospital groups in India,'' Dr Tan See Leng, managing director and chief executive of IHH, said.
''India has tremendous growth potential with its rapidly increasing demand for quality private healthcare. We are excited to bring our track record of providing superior patient outcomes and will ensure the change of ownership will be seamless for both patients and employees. The hospitals will continue to deliver the best-in-class medical care and outcomes that both IHH and Global Hospitals are known for,'' he added.
The acquisition augments and complements IHH's position among the leaders in the quaternary care segment. IHH's India portfolio comprises approximately 1,800 beds with potential to reach up to 4,000 beds in the next 5 years.
''We are delighted to join the IHH family, which shares our commitment to ensuring superior clinical outcomes for our patients. With IHH's international experience and best-in-class- knowhow, and our growth potential, we look forward to our enhanced ability to better meet the healthcare needs of Indians as well as international medical travellers,'' Dr K Ravindranath, founder and chairman of Global Hospitals, said.
With its expanded presence in India, IHH aims to extract further business synergies, cost savings and operating leverage through centralised procurement, optimised backroom functions, common branding and marketing strategy, sharing of doctors and better utilisation of facilities.
''This deal signifies IHH's continued commitment to expand in markets where there is strong, growing demand for quality healthcare. With this transaction, we remain confident in our ability to deliver sustainable, long-term value creation for our shareholders,'' IHH chairman Dr Abu Bakar bin Suleiman said.
The acquisition of Global Hospitals boosts IHH's beds globally to more than 8,000 across 45 hospitals in 10 countries.
Pending necessary approvals and satisfaction of certain conditions, the deal is expected to close within three months.