Fortis Healthcare has inked a deal to sell its Singapore-based healthcare services unit RadLink-Asia Pte Ltd and its subsidiaries to Fullerton Healthcare Group for S$111 million (approximately $83.5 million or Rs 530 crore), it said on Friday.
This marks a climb-down in valuation within months. Last September, Fortis had announced a deal to sell RadLink to Malaysian firm IHH Healthcare for S$137 million ($108.6 million or Rs 660 crore).
This deal was nixed by Competition Commission of Singapore (CCS), which had raised competition concerns over the proposed acquisition. IHH, the largest healthcare service firm in Asia, also runs a large establishment in Singapore under Parkway. IHH is partly owned by Malaysia sovereign fund Khazanah.
RadLink, which was acquired in 2012-13, is engaged in the provision of healthcare services including outpatient diagnostic and molecular imaging services in Singapore.
The divestment is part of Fortis' efforts to disengage from its international expansion strategy, having previously sold assets in Hong Kong, Australia and Vietnam.
“The significant value that we have created in our international healthcare businesses is now being unlocked and will be ploughed back to strengthen our growth in India,” Fortis Healthcare executive chairman Malvinder Singh and executive vice chairman Shivinder Singh said in a joint statement.
The deal is expected to be completed by May 12.
“The divestment of this last major international business is in line with our strategic decision to intensify our focus on our core hospital and diagnostics business in India,” the duo added.
Fortis had flipped its strategy of international expansion within one year of a $665 million deal to buy assets owned by its promoters and now derives almost all revenues from India.
After buying some assets from its promoters in Asia Pacific, it became the first Indian healthcare firm to build a strong overseas business. However, it took a u-turn from its previous strategy of going international, by selling its largest overseas healthcare assets in Vietnam, Australia and Hong Kong. The firm is now focusing on India. It also went asset light by spinning out physical assets into a Singapore-listed entity.
Earlier in 2010, Fortis promoters had also locked themselves into a takeover battle with Khazanah for Singapore's Parkway. They had later pulled out from the battle and sold their own stake to Khazanah.
It was after this that they went about acquiring other firms in Southeast Asia and then lent their own public listed company Fortis to buy their privately held assets. Most of these overseas assets have now been divested.
Fortis last traded at Rs 155 a share, up 1.87 per cent on the BSE in a weak Mumbai market on Thursday. The stock markets were closed for trading on Friday.
JP Morgan and Religare Capital Markets acted as financial advisors to Fortis for the latest transaction. They had also advised the firm in another deal two months ago where Fortis said it is selling a Singapore-based hospital asset to NYSE-listed Chinese healthcare services firm Concord Medical Services for S$55 million ($40.2 million or Rs 251 crore).
Headquartered in Singapore, Fullerton Healthcare Group provides corporate healthcare solutions in the Asia-Pacific region. The company operates over 130 fully-owned clinics across the Asia-Pacific, and are supported by a global network of more than 1,000 doctors and nurses, 8,000 medical providers and institutions. In the past, Southern Capital had invested in Fullerton Healthcare.
(Edited by Joby Puthuparampil Johnson)