Oncology focused HealthCare Global bids to buy Sterling to foray into multi-specialty hospitals

Bangalore-based HealthCare Global Enterprises Ltd (HCG), one of the largest cancer treatment hospital chains in the country, is looking to enter the multispecialty hospitals business and has put its bid to acquire PE-controlled Sterling Hospitals as part of the plan, sources in the company told VCCircle.

“HCG has a multispecialty hospital in Gujarat; it acquired the firm to turn it into an oncology unit but couldn’t do so successfully; hence it operated it as a multispecialty hospital. Now, HCG is looking to expand into the multispecialty segment in the state. However, the core focus of the company across India will continue to be in oncology,” sources said.

Earlier The Times of India reported that the firm has bid Rs 500 crore and is in an advanced stage to buy Sterling Hospitals though the latter is also being wooed by DM Healthcare and NMC Health. This was independently confirmed by VCCircle.

When contacted by VCCircle, BS Ajaikumar chairman and CEO of HCG, declined to comment on the deal but maintained that the focus of the company at present continues to be in oncology.

Sterling Hospitals, 80 per cent of which is owned by PE firm Actis, runs multi-specialty hospitals in locations including Ahmedabad, Rajkot, Vadodara, Bhavnagar and in Mundra SEZ. The remaining 20 per cent of the company is owned by Girish Patel, former Paras Pharma promoter.

Actis, which was earlier a part of CDC Group Plc, has around $5 billion assets under management and provides capital for buy out and growth transactions in companies operating in Africa, China, Latin America, South and Southeast Asia. It invests in consumer, financial, engineering, healthcare and real estate companies among others.

This is the second attempt by the PE fund to sell off Sterling Hospitals. Kotak Mahindra is advising Actis for this deal. Earlier, Actis had tried to sell the company in 2011 but no deal materialised and the process was kept on the backburner. Actis was then looking for an enterprise value of Rs 550-600 crore and India Value Fund Advisors was rumoured to be in the race.

In an earlier interaction with VCCircle, BS Ajaikumar had said that the company is planning to expand its network by 28 more centres in India and Africa. The company at present operates 27 centres which include departments within other multi-specialty hospitals and super specialty cancer hospitals.

The company till now has raised multiple rounds of funding from names like Evolvence, Milestone Religare Investment fund (now under Quadria Capital), PremjiInvest and IDFC PE. It has also raised another Rs 320 crore through debt. In the most recent transaction, HCG raised funding from Temasek early this year. Evolvence and IDFC PE have exited in the past.

Leave Your Comment(s)