Ontario Teachers' Pension Plan Board said it has agreed to acquire a significant majority stake in hospital chain, Sahyadri Hospitals from Everstone Group in the Canada-based investor's first control private equity buyout in India.
Everstone and Sahyadri Hospitals' key management and founders will continue to retain minority stakes in the healthcare firm, said Ontario in a statement without disclosing the financial details of the transaction.
The deal is expected to be completed by the end of this year, it added.
VCCircle reported in August last year that Everstone had initiated the process to exit Sahyadri Hospitals just a little over two years after its investment in the company. Everstone had agreed to acquire a controlling stake in Sahyadri in April 2019. The transaction was completed some months later in the year.
Founded by neurosurgeon Charudutt Apte in 1994, Sahyadri Hospitals has eight hospitals with 900 operating beds and 300 critical-care beds in Maharashtra state, primarily concentrated in Pune city.
The healthcare company aims to grow its bed capacity by over 500 in the next five years, the statement said.
The hospital chain clocked nets sales of Rs 544 crore in fiscal 2020-2021 as compared with Rs 467 crore in the previous financial year, according to VCCEdge, the data and intelligence platform of VCCircle. Operating profit expanded to Rs 130 crore during the period versus Rs 84 crore.
Sahyadri Hospitals previously counted homegrown private equity firms IDFC Alternatives and ICICI Venture as its investors.
Raju Ruparelia, senior managing director, private capital, Asia-Pacific at Ontario, said that the investor believe that it can leverage its significant global experience in the healthcare sector to help scale Sahyadri Hospitals into a national healthcare provider in the coming years.
Ontario had net assets of 242.5 billion Candian dollars as of June 30, 2022. It invests in more than 50 countries in equities, real estate, infrastructure as well as providing venture growth capital.
In its recent India bet, Ontario committed $175 million to boost alternative investment company KKR & Co’s road platform in India earlier in April. The transaction marked its third infrastructure investment in India following purchase of 25% stake in the National Highways Infra Trust late last year and an anchor investment in the National Investment & Infrastructure Fund (NIIF).
According to a VCCircle analysis in May, several private equity firms are preparing to exit hospital investments to capitalize on abatement of the pandemic and a rebound in businesses of their portfolios.
Earlier this week, private equity giant KKR sold its entire 27% stake in hospital chain Max Healthcare Institute for around Rs 9,400 crore via block deals.
In another recent hospital transaction in India, TPG-backed Care Hospitals acquired a “significant majority” stake in Aurangabad-based United Ciigma Hospital in its third acquisition since April.