Fortis Healthcare Ltd has entered into an agreement with Viva Holdings Vietnam (Pte.) Ltd, a wholly owned subsidiary of Chandler Holdings Ltd and a Chandler Corporation company, to sell its entire stake in Fortis Hoan My Medical Corporation in Vietnam, for $80 million.
Vishal Bali, Group CEO, Fortis, said, “In keeping with our current priorities in allocation of resources and further strengthening our balance sheet, we have decided to accept this unsolicited offer from Viva Holdings.”
The company said the transaction is EPS accretive to Fortis Healthcare and post this divestment the net debt to equity ratio of the company is expected to go down to less than 0.6x.
The sale of the business comes within two years of the group buying a majority stake in it. Fortis Healthcare International Pte, the Singapore-based holding company owned by India’s billionaire Singh brothers, Malvinder and Shivinder, had acquired 65 per cent stake in Hoan My Medical Corp for $64 million (Rs 290 crore back then) in late 2011.
Soon thereafter the Singh brothers decided to sell Fortis Healthcare International, which operated healthcare firms in the Asia-Pacific region including Hoan My, to their majority-owned, public-listed firm Fortis Healthcare for $665 million (Rs 3,274 crore) in the biggest ever deal in the Indian healthcare services industry.
Established in 1997, Hoan My is one of Vietnam’s largest private healthcare provider groups with 800 beds across four clinics and five hospitals.
This would be the second such strategic exit for Fortis. A few months ago it sold its stake in Australia’s Dental Corporation Holdings Ltd to Bupa Australia Health Pty Ltd for $286 million (A$270 million). The stake sale comes as Fortis has not been able to expand the model pan-Asia, keeping it limited to Australia and New Zealand.
Fortis acquired Dental Corporation in December 2010, initially buying 33 per cent stake for A$100 million. Fortis then increased its stake to 58 per cent for another A$100 million, paying a premium in January 2011. It is estimated to have made a profit of 23 per cent on its two-year-old investment.
The deal helps Chandler Holdings expand its footprint in the healthcare space. The firm had set up Viva Healthcare four years ago and, as per its website, has operations in Indonesia, the Philippines, Egypt and Kenya.
(Edited by Joby Puthuparampil Johnson)