Trikona Trinity Capital Plc has completely exited its three-year-old investment in healthcare chain Fortis Healthcare with an 11.85% return. After selling over two- thirds of its investment (bought as a pre-IPO transaction) early this week, it sold the remaining stake over the last two days ahead of a scheduled exit of September 2010.
The AIM-listed firm sold 2.9 million remaining shares at an average price of Rs 160.18 per share, almost the same as the previous share sale (Rs 160.05). Trinity Capital had invested in Fortis in two tranches (January-March 2007) a total of Rs 115 crore at Rs 143.75 a piece.
In a disclosure at the AIM, the investment firm said, it had acquired its holding in Fortis for GBP13.5 million ($20.78 million) and has therefore realised a profit on its investment of approximately GBP 1.6 million ($2.5 million). In the company’s latest interim results as at 30 September 2009, the carrying value of the investment in Fortis was GBP 11.6 million ($17.86 million).
This could be one of the underperforming investments for Trinity Capital that aims at IRR of 25% in its investments. In the same period that it invested in Fortis the 30-stock benchmark index Sensex rose 33%.
The complete exit by Trikona Trinity comes even as Fortis is making significant overseas moves. Last month Fortis Healthcare announced the largest overseas acquisition by an Indian company in the healthcare sector, buying TPG Capital’s entire 23.9% stake in Singapore’s Parkway Holding Ltd for $686 million (Rs 3,119 crore), and created Asia’s largest healthcare firm.
This move was in line with similar inorganic expansion back home where Fortis acquired Greenfield Hospital Division of Wockhardt Hospitals that gave it ten hospitals of Wockhardt for Rs 909 crore in August this year. The acquisition was part-funded by a rights issue of Rs 997 crore, internal accrual and debt.