TPG Growth invests $33 mn in hospital chain Motherhood

TPG Growth said on Tuesday it has invested $33 million (Rs 220 crore) in Rhea Healthcare Pvt. Ltd, which runs a chain of mother- and child-care hospitals under the brand Motherhood, for a significant majority stake.

The partnership with TPG Growth--the mid-market and growth-equity investment platform of leveraged-buyout group TPG--will help the hospital operator expand its footprint across India, Motherhood chairman Mohammed Rehan Sayeed said in the statement.

It wasn't immediately clear whether Motherhood's existing investor, Peepul Capital, exited the firm. In a recent interaction with VCCircle, Sayeed had said the promoters of Motherhood had offered to buy back Peepul Capital's stake. He had also said that the company had hired KPMG and was looking to raise Rs 100 crore ($15 million).

Motherhood, which was founded in 2011, had raised Rs 85 crore from Peepul Capital in 2013. The funds were used to open five centres, Sayeed said. 

The company has three centres in Bangalore and one each in Chennai and Hyderabad with a total of 235 beds. Motherhood follows an asset-light model wherein it does not own the land and building but brings in technology, equipment and manpower.

Rhea Healthcare is promoted by the family members of noted film actor Mammootty. The actor and his son Dulquer Salmaan are directors at the company.

This is second deal in seven months in the mother- and child-care space after private equity firm India Value Fund Advisors invested Rs 400 crore (about $60 million) for a significant minority stake in Kids Clinic India Pvt. Ltd, which operates Cloudnine Hospitals. 

TPG's healthcare investments

TPG Growth’s investment in Motherhood is the latest in a series of healthcare investments the fund has made in India and the region. In April, TPG said it bought a majority stake in India- and South Asia-focused cancer treatment provider Cancer Treatment Services International (CTSI) for an undisclosed amount. 

“On the heels of TPG Growth’s partnership with CTSI, this investment in Motherhood continues the firm’s momentum in India’s healthcare market," said Vishal Bali, senior healthcare adviser for TPG Growth in India. "Motherhood exemplifies an inflection point, where consumer demand is shaping new models of healthcare delivery in India.” 

TPG Growth had also invested in Bangalore-based surgical consumables maker Sutures India Pvt Ltd in 2013. 

In December 2015, TPG Growth acquired a 28% stake in Sri Lanka’s Asiri Hospital Holdings from private equity firm Actis Investment Holdings.

TPG Growth’s investments in healthcare companies including Motherhood across India and Sri Lanka now total nearly $250 million, the statement said.

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