Fortis Healthcare Ltd, the second-largest hospital chain in the country, is selling its Singapore-based hospital to NYSE-listed Chinese healthcare services firm Concord Medical Services for S$55 million ($40.2 million or Rs 251 crore), according to a stock market disclosure.
Fortis Surgical Hospital (FSH), which was opened in July 2012, is a 31-bed hospital and specialises in colorectal, urology, gynecology, plastic and general surgeries. The hospital positions itself as a specialist in minimally invasive procedures and offers a range of clinical services, including laparoscopic and robot-assisted surgeries.
“Our decision to divest is in tune with our strategy to intensify our focus on our hospitals and diagnostics business in India,” co-promoters Malvinder Singh (executive chairman) and Shivinder Singh (executive vice-chairman), Fortis Healthcare, said in a joint statement.
Shares of Fortis Healthcare closed at Rs 163.45 each, up 4.51 per cent on BSE in a strong Mumbai market on Friday.
JP Morgan and Religare Capital Markets acted as the financial advisors to Fortis on this deal. The transaction is expected to be completed in the first week of April.
This deal would mark another move by Fortis to disengage from its international expansion strategy, having previously sold assets in Hong Kong, Australia and Vietnam. 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.
Last year it had inked a deal to sell its entire holding in another Singapore-based asset, diagnostics services firm RadLink-Asia Pte Ltd and its subsidiaries to Medi-Rad Associates Ltd (Medi-Rad), an indirect wholly-owned subsidiary of IHH Healthcare Berhad, for S$137 million ($108.6 million).
Recently, the Competition Commission of Singapore (CCS), which had earlier raised competition concerns over the proposed acquisition of diagnostics services provider RadLink-Asia Pte Ltd by IHH Healthcare, ruled that it will lead to lessening of competition. IHH separately controls Parkways which has a large presence in Singapore.
The proposed $109 million deal where Fortis was to divest the asset to IHH Healthcare, which is controlled by Malaysian sovereign wealth Khazanah, stands scrapped.
Jianyu Yang, chairman and CEO of Concord Medical, said: “The acquisition is part of our high-end cancer hospital development strategy.”
The firm plans to add more medical specialties (oncology, cardiology, respiratory, dermatology, renal medicine, endocrinology radiotherapy and robot-assisted surgery) to the existing practice at this unit.
Concord Medical operates the largest network of radiotherapy and diagnostic imaging centres in China. As of December 31, 2014, it had a network of 139 centres with 80 hospital partners that spanned 56 cities and 25 provinces and administrative regions in China.
Under long-term arrangements with other top-tier hospitals, it provides radiotherapy and diagnostic imaging services and manages the daily operations of these centres, which are located on the premises of its hospital partners.
(Edited by Joby Puthuparampil Johnson)