Apollo to buy majority stake in Guwahati-based hospital for up to $9M
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Apollo to buy majority stake in Guwahati-based hospital for up to $9M

By Jasleen Kaur Batra

  • 02 Jun 2015
Apollo to buy majority stake in Guwahati-based hospital for up to $9M

Apollo Hospitals Enterprise Ltd, the country's top healthcare service company, has inked a deal to acquire 51 per cent stake in a medium-size hospital in Guwahati run by privately held firm Assam Hospital Ltd (AHL) for up to Rs 57.25 crore ($9 million), as per a stock market disclosure.

AHL currently runs a 220-bed hospital under the brand International Hospital. Post the acquisition, Apollo plans to upgrade as well as expand the capacity of the existing facility to 300 beds and intends to introduce new services.

Located on the Guwahati-Shillong Road, International Hospital started with a 50-bed capacity unit in 2000 and expanded over time. It claims an occupancy level of over 80 per cent.

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Suneeta Reddy, managing director of Apollo Hospitals, said, “To strengthen Apollo's position in the north-east region, we were on the lookout for acquisitions to grow inorganically and considers the acquisition as the right choice given its significant presence in the north-east region.”

Earlier this year, Apollo acquired Nova Specialty Hospitals, the short-stay surgical centres unit of Nova Medical Centers Pvt Ltd, for around Rs 145 crore ($24 million).

The group also has interests in health insurance, global projects consultancy, academic institutions and clinical trials among others and the listed flagship is now foraying into the single specialty segment by launching hospitals in cardiology and oncology space.

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Earlier this year, it also said it may look to rope in private equity investors to back its expansion plan which entails an investment of around Rs 1,500 crore (under $250 million) to add capacity in two years.

In 2013, promoters of Apollo Hospitals raised $89 million (Rs 550 crore) from private equity major Kohlberg Kravis Roberts and its affiliates for its privately held holding firm PCR Investments. The investment was in the form of a five-year callable security and will be used to repay promoters’ debt. KKR subscribed to the convertible debentures issued by PCR Investments with an option to convert these into equity shares of listed flagship Apollo Hospitals at the end of five years.

There have been a slew of deals in the hospital domain. Last week, Max Healthcare Institute Ltd, an equal equity joint-venture between Max India Ltd and South Africa's Life Healthcare, inked an agreement to acquire 76 per cent in Pushpanjali Crosslay Hospital for Rs 287 crore ($48 million).

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Early this year, Malaysia's IHH Healthcare Bhd, Asia's largest hospital operator by stock market value, acquired a controlling 51 per cent equity stake in Hyderabad-based Continental Hospitals Ltd for about Rs 281 crore (approximately $45.4 million).

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