Amar Ujala Ltd has acquired a majority stake in a private equity-backed regional hospital chain Cygnus Medicare Pvt. Ltd for Rs 130 crore ($18.18 million), the media firm’s director Probal Ghosal said.
As part of the transaction, Amar Ujala’s two Ujala Healthcare hospitals will be merged with Cygnus Medicare, Ghosal told the Press Trust of India. The two hospitals are based in Kashipur, Uttarakhand and Rohtak, Haryana, according to Ujala Healthcare's website.
Ghosal will be chairman of the merged company while the promoters of Cygnus -- Dinesh Batra (CEO) and Shuchin Bajaj (Director) -- will continue in their roles.
The deal also involved a secondary component that enabled Cygnus to give full exits to its angel investors and partial exits to its private equity investors -- Eight Roads Ventures and Somerset Indus. Rohit Batra, partner at Evolvence India Fund, said that the private equity firm did not exit in the process.
The promoters of Cygnus and the private equity investors will continue to hold their remaining stakes while Amar Ujala through its healthcare arm will hold majority stake with management control.
Cygnus, which aims to have a total of 20 hospitals in the next three years, currently has over 1000 beds across its 10 hospitals in Delhi and Haryana.
An email sent to Cygnus seeking further details on the deal did not elicit any response.
Cygnus, which was founded in 2011, had merged with Altius Healthcare. The Altius was founded in 2008 by doctors Shuchin Bajaj and Naveen Nishchal, besides Ruchin Bajaj, in 2012.
Venture capital firm Sequoia, which had swapped its stake in Altius with that of Cygnus, had exited the firm with 1.5 times returns when Somerset invested in the company, VCCircle had reported then.
Subsequently, in 2013, Somerset, a Mumbai-based healthcare-focussed fund, invested an undisclosed amount in Cygnus. Eight Roads Ventures, formerly Fidelity Growth Partners India, led a Rs 60 crore ($10 million) investment round the following year.
Evolvence invested about $3 million in Cygnus in 2016 via Evolvence India Fund II. In December 2017, the hospital chain raised fresh capital from its existing investors.
Regional hospital deals
The regional hospital segment has recorded several deals this year, though mostly involving private equity investments rather than strategic buyouts.
In September, Tamil Nadu’s Kauvery Hospital raised Rs 140 crore from impact investor LGT Lightstone Aspada.
In July, VCCircle reported that Hyderabad-based Krishna Institute of Medical Sciences (KIMS Hospitals) was in talks to acquire a private equity-backed regional hospital chain based in Secunderabad.
At least three PE-style deals were recorded in June. Overseas Private Investment Corporation, a development finance institution of the US government, invested in Tamil Nadu-based Be Well Hospitals Pvt. Ltd; Somerset Indus Capital Partners invested in Jaipur’s Apex Hospitals; and KKR, via its credit business, invested in Kerala-based Baby Memorial Hospital Ltd.
In April, Everstone Group agreed to acquire a controlling stake in Sahyadri Hospitals Ltd, which operates five tertiary-care and three secondary-care hospitals with 900 beds across Pune and Nashik.
Earlier this month, VCCircle reported that Paras Healthcare Pvt. Ltd, which runs a chain of hospitals in North India under the Paras Hospitals brand, is looking to acquire a multi-speciality healthcare facility in the region.