Private equity giant KKR has agreed to acquire a 49% stake in Indian hospital management company Radiant Life Care Pvt. Ltd for $200 million (Rs 1,288 crore).
KKR, which has pumped in more than $3 billion through PE funding in India since 2006, will invest through its KKR Asian Fund III in Radiant, the Mumbai-based healthcare company said in a statement.
The firm had raised a record $9.3 billion for its latest Asia fund in June.
The PE firm has previously extended financing to Radiant to support the company’s growth, it added without detailing the amount and the projects it invested in earlier.
The healthcare company, which was founded in 2000, will use the funds to expand its presence in the country and will also look at acquisitions, the statement said.
“In this industry, scale and operating leverage are increasingly important, and Radiant has a unique opportunity to acquire assets during a time of industry consolidation," said Sanjay Nayar, CEO at KKR India. Nayar and KKR director Nikhil Srivastava will join Radiant’s board.
Radiant chairman and managing director Abhay Soi said KKR has been a long-term partner to the company and that the two firms share their vision for healthcare excellence in India.
The company started operations with the redevelopment of BLK Super Speciality Hospital in New Delhi in 2010. BLK is now being expanded into a 1,600-bed quaternary care hospital.
Later, Radiant collaborated with the Nanavati Hospital Trust in 2014 to take over the operations of the 350-bed multi-specialty Nanavati hospital in Mumbai. The company plans to expand Nanavati into a 1,000 bed quaternary care institute over the next four years.
Hospital deals in focus
PE firms have been actively striking deals in the hospital sector in the past few years, seeking to tap into a growing market. According to a report by audit and consulting firm PricewaterhouseCoopers, India requires 600,000-700,000 additional beds over the next five to six years, indicating an investment opportunity of $25-30 billion.
Earlier on Monday, Paras Healthcare Pvt. Ltd, which runs a chain of hospitals in North India under the Paras Hospitals brand, said it raised $42 million (Rs 275 crore) from South- and Southeast-Asia-focussed private equity firm Creador Advisors India Pvt. Ltd.
In March, homegrown private equity firm True North Managers LLP said it would invest $200 million in Kerala Institute of Medical Sciences.
Last year, Dubai-based private equity investor Abraaj Group had agreed to acquire a majority stake in Hyderabad-based multi-speciality hospital chain CARE Hospitals in a secondary transaction from PE firm Advent International. The deal was struck at an enterprise value of about $270 million.
KKR’s private equity portfolio in India includes Aricent, Bharti Infratel, Avendus Capital, Cafe Coffee Day, Emerald Media, Magma Fincorp, Max Financial Services, and SBI Life Insurance Company.
Its major activity in India's healthcare sector recently was an exit from Hyderabad-based pharmaceuticals Gland Pharma Ltd last year.
In addition to its private equity business in India, KKR is focussed on credit, capital markets and real estate opportunities in the country.