Hospital chain Columbia Asia raises $101 mn from Japan’s Mitsui

Columbia Asia, which operates a chain of hospitals in India and Southeast Asia, said it has raised $101 million (Rs 672 crore) from Japanese trading and investment firm Mitsui & Co. Ltd.

The company will use the funds to expand its network of hospitals across Asia, including several current development projects, it said in a statement. It will also open its first facility in Africa next month, a multispecialty clinic in Kenya's capital Nairobi, under the new Columbia Africa brand.

The hospital chain comprises Bangalore-based Columbia Asia Hospitals Pvt. Ltd, which operates 11 hospitals in India, and Malaysia-based Columbia Asia Healthcare Sdn Bhd, which runs 16 hospitals and one clinic in Malaysia, Vietnam and Indonesia. The group is part of Seattle, US-based Columbia Pacific Management Inc. 

In 2014, the hospital chain had said it planned to invest $150 million over the next four years to expand its operations in India and Southeast Asia. 

As part of the investment by Mitsui, two of its executives will join the board of Columbia Asia. Koji Nagatomi, managing officer and COO, healthcare and service business unit of Mitsui, said Columbia Asia has proven over 20 years that it can enter new markets and develop high-quality hospitals that meet the needs of the emerging middle class.

Mitsui has previously invested in some other healthcare companies. It put money in IHH Healthcare Berhad, the largest healthcare company in Asia, in 2011. It backed MIMS group, which provides drug information to about 2 million healthcare professionals in Asia-Oceania in 2015, and invested in dialysis chain operator DaVita Care Pte. Ltd in 2016. 

Investments in India's healthcare sector

Foreign hospital chains have been expanding their presence in India while local hospital chains are also seeing strong interest from private equity funds. These companies are seeking to benefit from growing opportunities in a country where the healthcare sector needs an investment of around $245 billion over 20 years, PricewaterhouseCoopers estimated last year. The audit and consulting firm also estimated that India needs to add 3.6 million beds, 3 million doctors and 6 million nurses over the next 20 years. 

Columbia Asia competes with the likes of Fortis Healthcare Ltd, Aster DM Healthcare Ltd Apollo Hospitals, India's largest hospital operator.

Aster DM Healthcare, which runs hospitals spread across India and the Middle East, recently filed its draft documents with the capital markets regulator to float its initial public offering. The company, which gets under 13% of its revenue from India, is looking to raise around Rs 1,900 crore through the IPO. 

In other deals in the healthcare sector, VPS Healthcare, an Abu Dhabi-based hospital chain founded by non-resident Indian Shamsheer Vayalil, acquired New Delhi-headquartered Rockland Hospitals earlier this month. 

Malaysia's IHH Healthcare acquired a majority stake in Global Hospitals for $195 million and in Continental Hospitals for $45.4 million last year. 

Dubai-based private equity investor Abraaj Group acquired a majority stake in Hyderabad-based multi-specialty hospital chain CARE Hospitals from PE firm Advent International in January.

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