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KIMS to buy majority stake in Sunshine Hospitals
Photo Credit: 123RF.com

Krishna Institute of Medical Sciences Ltd (KIMS), which listed on the stock exchanges earlier in June, said it will acquire a 51.07% equity stake in Sunshine Hospitals, once backed by healthcare-focused private equity firm InvAscent, for Rs 362.78 crore ($48 million).

The acquisition will consolidate its position in key markets and complement its cardiology, neurology, transplant and renal sciences team, said KIMS in a stock exchange filing.

The combined entity will have 12 hospitals across nine cities with 3666 beds and over 1200 doctors and more than 12000 employees, it added.

As part of the transaction, KIMS will pay Rs 230 crore for 6.41 million fully paid-up equity shares and 12.23 million partly paid-up equity shares. The remaining will be paid after the completion of the purchase of the 12.23 million partly paid-up equity shares as and when Sunshine Hospitals calls for the payment.

The acquisition is expected to be completed by April next year.

Sunshine Hospitals, which is operated by Sarvejana Healthcare Pvt. Ltd, specialises in joint replacement, cardiology and critical and trauma care. It was founded in 2009 by doctor-turned-entrepreneur AV Gurava Reddy. It has units in Secunderabad, Karimnagar and Kukatpally in Telangana state.

The company posted a turnover of Rs 411.77 crore in the fiscal ended March 31, 2021 as compared with Rs 364.33 crore in fiscal 2019-20 and Rs 333.53 crore in fiscal 2019-20.

InvAscent had invested Rs 100 crore in Sunshine Hospitals in 2015 through its India Life Sciences Fund II. A spokesperson said India Life Sciences Fund II had exited Sunshine Hospitals several months ago and hence is not part of the KIMS transaction.

KIMS was set up in 2004 by Bhaskara Rao, a cardiothoracic surgeon. In addition to providing core medical, surgical and emergency services, it gives advanced quaternary healthcare in various specialties under disciplines such as neurosciences, cardiac sciences, oncology, orthopaedics, renal sciences, organ transplantation and gastric sciences.

Earlier this year, it floated its initial public offering (IPO) and got listed on the bourses in June. Notably, this was not its first attempt at an IPO. In 2018, it had withdrawn its IPO plans in 2018 after striking a private equity deal with General Atlantic. That had paved the way for the exit of its earlier investor ICICI Venture.

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