Asian healthcare sector-focused private equity firm Quadria Capital, along with German and Swedish development financial institutions DEG and Swedfund, respectively, has invested an undisclosed sum to pick up a significant majority stake in hospital chain Medica Synergie Pvt Ltd.
The deal involves buying stake held by ICICI Venture besides fresh infusion of cash into the Kolkata-based company.
“Medica represents a great opportunity to work with a strong management team to improve the access to high quality care across a trusted hospital network in east India. We believe in the growth of this company and we are creating eastern India’s largest healthcare network in the private sector,” Dr Amit Varma, co-founder and managing partner of Quadria Capital told VCCircle.
Medica Synergie, promoted by Dr Alok Roy and other doctors in the company, currently has around 600 operational beds in hospitals located in Kolkata and Siliguri. The company is planning to triple its size in the next three years, according to Varma.
While Varma declined to comment on how much the company will invest for its expansion, with average hospital bed cost in the region being between Rs 30-50 lakh, the company could invest anywhere between Rs 36-60 crore for the expansion.
The expansion of the company would include a focus on tier II and III markets which are highly underpenetrated, according to Varma.
“We believe that tier II and III markets are grossly underserved in this region and would be our focus. Also, we will build out company’s oncology platform which has a huge demand-supply gap in this region,” he said.
The company will also rely on telemedicine to increase its accessibility and reach.
While Varma said that the transaction involves both primary and secondary components, he declined to comment on how much of the total deal value went to ICICI Venture.
Mumbai-based ICICI Venture, which is one of the largest homegrown private equity players, had initially invested around Rs 68 crore in the company in 2007 and as per media reports later hiked its stake to hold a majority stake taking its exposure to around Rs 90 crore.
Quadria Capital, founded by Amit Varma, Abrar Mir and William Costello, hit the first close of its second fund at $107 million earlier this year. The fund is targeting a final close of $300 million.
Earlier this year Quadria Capital acquired Milestone Religare Investment Advisors Pvt Ltd, a joint venture between Milestone Capital and Religare. Through this acquisition Quadria Capital built a significant healthcare portfolio especially in delivery space.
Milestone Religare from its Rs 434 crore India-Build-Out-Fund-I has till now invested in six companies in sectors like healthcare education, credit research, food and agri industries. The healthcare portfolio of this fund includes oncology hospital chain HealthCare Global Enterprises Ltd (HCG) and Kerala Institute of Medical Sciences (KIMS).
(Edited by Joby Puthuparampil Johnson)