PE-backed Max India To Invest $47M In ‘Senior Living’ Biz

19 April, 2012

Warburg Pincus-backed diversified firm Max India is acquiring a group company which will develop senior home living projects. Max India will pump in Rs 240 crore ($47 million) in the firm as part of its business expansion plan.

Analjit Singh-led Max India, which is into healthcare services, insurance and other businesses, will buy promoter group firm Antara Senior Living Pvt Ltd at par value of Rs 1 lakh and then invest afresh to build its operations.

The senior living project will encompass properties for independent living with nursing and other human care services, besides social, educational, devotional and recreational programmes targeted at senior citizens – so that living would go beyond the scope of old age homes.

The senior living business, which is currently under the promoter’s firm Max Ventures, is led by Tara, the youngest of the three children of Analjit Singh. His daughter Piya, the eldest of the three, is involved in the healthcare business while son Veer is associated with the group’s hospitality business.

Besides Warburg Pincus, other investors in Max India include Goldman Sachs Capital Partners (which recently converted its debentures for over 9 per cent stake), Singapore sovereign wealth fund Temasek (which had bought 3.47 per cent stake from the markets) and IFC.

This move comes close on the heels of striking fresh strategic investment deals wherein Max India roped in a new partner for the healthcare business and recently brought in a new partner for its insurance business.

Last week, Japan’s Mitsui Sumitomo Insurance Company Ltd said that it would be acquiring 26 per cent stake in Max New York Life Insurance Company Ltd for Rs 2,731 crore ($530 million), in a two-tiered transaction that would mark the exit of USA’s New York Life Insurance Co from the JV while leaving Max India with a neat profit.As per the arrangement, Max India, the majority partner in the Indian insurance joint venture, will acquire 9.37 per cent stake in Max New York Life Insurance from its US JV partner New York Life Insurance for Rs 182.2 crore ($35 million), which it would sell to Mitsui Sumitomo for Rs 984.45 crore ($191 million). This would give Max India a profit of over Rs 800 crore ($160 million).

The Japanese insurance major will acquire the balance 16.63 per cent from New York Life Insurance for 1,746 crore ($339 million).

In another development related to Max India, its private equity investor Warburg Pincus has been part-exiting from its eight-year-old investment in the firm. The PE firm sold 4.2 per cent stake for Rs 197.5 crore ($39 million) early this month.

Warburg Pincus held a little less than 6 per cent stake in Max India as of December 1, 2011, and its remaining 1.5 per cent stake is valued at around Rs 72 crore. Last year, Warburg exited its direct holding in the healthcare arm Max Healthcare.

Soon thereafter, South Africa’s Life Healthcare Group Holdings said that it would be acquiring 26 per cent stake in Max Healthcare Institute Ltd for Rs 516.5 crore. This investment came at over two times the valuation of Rs 855 crore at which Max India bought the stake of Warburg Pincus, and a little less than 2x pre-money valuation in that transaction.

Max India scrip rose 2 per cent to close at Rs 199.25 a share on the BSE in a strong Mumbai market on Tuesday. At this price, Warburg Pincus is sitting on unrealised gains of around 5x on its remaining stake in the company.


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PE-backed Max India To Invest $47M In ‘Senior Living’ Biz

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