Aster DM Healthcare ups stake in Saudi hospital for $247M

Aster DM Healthcare, the hospital chain controlled by Dubai-based Indian billionaire Azad Moopen, has acquired a majority stake in Saudi Arabia's Sanad Hospital for Rs 1,600 crore (about $247 million), The Economic Times reported on Monday citing Moopen.

The report said that Aster, which in December 2011 had acquired 40 per cent of the hospital in Riyadh, raised its stake to 97 per cent by buying shares from its Saudi partner. This is one of the largest healthcare deals in West Asia, the report said.

The company received approvals from the Saudi Arabian General Investment Authority, the body that makes decisions related to foreign investment in the kingdom, last month. “The Kingdom of Saudi Arabia allows 100 per cent foreign investment in hospitals, provided a player can prove that he will bring in capital and expertise. That offered a perfect opportunity for us to enter a big market where two-third of the nearly 30 million population is local, unlike other Gulf countries where expats form a bulk of the population," Moopen told the newspaper.

The company was started by the Moopen family in Dubai and later moved its corporate base to India. It earns a major portion of its revenue from West Asia, with the largest chain of hospitals, clinics and pharmacies in the United Arab Emirates under the Aster and Medcare brands, and significant operations in Qatar, Oman and Saudi Arabia. It has five greenfield projects underway in Gulf Cooperation Council (GCC) countries, one hospital in Qatar and four in the UAE.

The company is also extensively looking to augment its presence in India and South Asia. In India, it operates eight hospitals – three hospitals in Kerala (Kozhikode, Kottakkal, Kochi), two in Maharashta (Pune, Kolhapur), two in Telangana (Hyderabad) and one in Karnataka (Bengaluru).

Aster has a capacity of 2,022 beds in India and 517 in the GCC. It recently invested Rs 550 crore in Aster Medcity in Kochi and is investing about Rs 230 crore in Aster CMI Hospital in Bengaluru.

Aster was also looking to list its Indian arm on stock exchanges. In September last year, people familiar with the matter had told VCCircle that the company had zeroed in on two bankers for the public float. It has yet to file its documents, however.

Aster is backed by India Value Fund Advisors (IVFA) and Olympus Capital. It had raised $60 million from Olympus Capital and IVFA last year. Earlier, Olympus Capital had invested $100 million in 2012 through a mix of a primary share purchase and a secondary transaction that saw IVFA making a part-exit. IVFA invested over $50 million in two rounds in the company in 2008 and 2011.

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