Private equity firm CVC Capital Partners is set to make its second India bet by investing in oncology chain HealthCare Global Enterprises Ltd (HCG) that listed a little over four years ago.
HCG said in a stock-exchange filing that it will sell 36% stake to CVC -- a move that is expected to trigger an open offer for an additional 26% stake.
As part of the transaction, HCG will issue 29 million equity shares and 22 million convertible warrants to CVC.
The deal comes a month after the private equity firm raised its fifth Asia fund.
The transaction also involves issuing two million warrants to HCG's promoter BS Ajaikumar, whose stake is expected to fall from 20% to 14%.
Others in the promoter group will hold 2.5% stake after the deal, from 4% at present.
The deal is subject to approval from shareholders and regulators.
Shares of HCG on Thursday ended at Rs 95.4 apiece on the BSE, up 1.44% in a flat Mumbai market.
This is the second major deal in the oncology space in the country since last year. New York-listed Varian Medical Systems Inc. bought TPG Growth-owned Cancer Treatment Services International for $283 million (Rs 1,974 crore) in May 2019.
Founded in 1998, HCG provides healthcare in India focused on cancer and fertility under the brand Milann.
HCG had listed on stock exchanges in 2016. Prior to its initial public offering it had roped in a string of private equity firms to back it over the years. Before the listing, it gave exits to two of them -- IDFC Alternatives and India Life Sciences Fund.
Other investors PremjiInvest, India Build Out Fund (now under Quadria Capital) and Temasek offered to sell part of their shares in the IPO. World Bank’s International Finance Corp. (IFC) and Sabre Partners had come in as anchors during its IPO.
HCG's revenue from operations grew to Rs 978.7 crore for the year ended 31 March 2019 from Rs 830.7 crore the previous year. Its net profit rose to Rs 25 crore from Rs 20.5 crore during the period.
For CVC, this will be its second deal in India. In its debut bet in the country, the private equity firm had picked up a majority stake in enterprise legal services firm UnitedLex BPO Pvt. Ltd in 2018.