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IVFA in race with TPG, Temasek consortium to buy KIMS hospital

13 October, 2016

Home-grown private equity firm India Value Fund Advisors (IVFA) is in the final race with a consortium of global private equity funds TPG Capital and Temasek Holdings Pte Ltd to buy hospital chain Kerala Institute of Medical Sciences or KIMS Group of Hospitals, multiple media reports said citing unidentified people.

Existing investors Ascent Capital Pvt. Ltd and OrbiMed Advisors LLC will sell their stakes and the promoters will sell an additional stake while retaining the right to run the business, the reports said. The Economic Times reported that the deal will value KIMS at Rs 1,300 crore while Mint said the transaction will value the hospital chain at Rs 2,670 crore.

Email queries sent to IVFA, KIMS and TPG Capital did not elicit any response while Temasek declined to comment.

Investment bank NM Rothschild has been mandated to overlook the transaction. The deal is expected to close by early next month, Mint said.

Thiruvananthapuram-headquartered KIMS, which is led by Dr M I Sahadulla, has acquired a number of hospitals in Kerala. It has operations in Kerala, Tamil Nadu and Gulf countries such as UAE, Qatar, Oman and Saudi Arabia with a combined capacity of 1,650 beds.

IVFA, which is investing out of its fifth fund, is expected to join hands with Canada Pension Plan Investment Board (CPPIB) and Abu Dhabi Investment Authority for the transaction, The Economic Times said while Mint said it could select either of the two.

For the home-grown private equity firm, this will be its third deal in a hospital chain. It already has a stake in Manipal Health and Aster DM Healthcare. Other healthcare investments of the PE firm include Syngene International, research arm of Biocon, and Kids Clinic India Pvt. Ltd, operator of mother and child care birthing centres Cloudnine Hospitals.

IVFA’s investment interest in KIMS also comes at a time when it is also looking to partially book profit from its investment in Aster DM Healthcare Ltd.

TPG, the mid-market and growth-equity investment platform of leveraged-buyout group TPG, has been actively deploying its funds in India’s healthcare system in the past months. Interestingly, it also holds a stake in Manipal Health. 

Early in July, TPG Growth invested $33 million (Rs 220 crore) in Rhea Healthcare Pvt. Ltd, which runs a chain of mother- and child-care hospitals under the brand Motherhood. Motherhood competes with IVFA’s portfolio firm Cloudnine.

In April, TPG said it bought a majority stake in India- and South Asia-focused cancer treatment provider Cancer Treatment Services International (CTSI) for an undisclosed amount.  

TPG Growth had also invested in Bangalore-based surgical consumables maker Sutures India Pvt Ltd in 2013.

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IVFA in race with TPG, Temasek consortium to buy KIMS hospital

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