Homegrown private equity firm True North Managers LLP will invest $200 million (Rs 1,298 crore) in Kerala Institute of Medical Sciences (KIMS), marking one of the largest PE investments in an Indian hospital chain.
True North, formerly known as India Value Fund Advisors, will buy a 40% stake in KIMS, the PE firm said in a statement.
The deal will provide an exit to existing investors Ascent Capital Advisors India Pvt. Ltd and OrbiMed Advisors LLC. True North will also make a primary capital infusion to fund the hospital chain’s growth plans in India and the Middle East. It didn’t give a breakup of the primary and secondary deals.
The total deal size is similar to the investment Dubai-based PE firm Abraaj Group in Hyderabad’s CARE Hospitals last year.
Another large PE deal involving a hospital firm was the investment by Carlyle Group in Gurgaon’s Medanta Hospitals three years ago.
However, True North is likely investing in KIMS along with its Limited Partners (LPs), or investors in its funds. The PE firm, in its statement, didn’t specify if that was the case but a person familiar with the development said that True North has a ready co-investment pool with its LPs and that a big chunk of the total amount will come from this corpus.
“We believe private equity has a key role in funding Indian healthcare services to address the sector’s supply-demand gap,” said Satish Chander, managing director at True North. The PE firm has made nine investments, barring KIMS across its different funds in the healthcare sector, he added.
As per the deal, the management team headed by KIMS Group chairman Dr MI Sahadulla will continue to run the company. KIMS, set up in 2002, hopes to become one of the largest healthcare providers in India and the Middle East in the next three to five years, said Sahadulla.
KIMS has a 650-bed tertiary care centre in Kerala, besides having presence in Kollam, Kottayam, Kochi and Perinthalmanna cities of the southern Indian state. It also runs healthcare units in Saudi Arabia, Qatar, Bahrain, Oman and Dubai.
In the healthcare sector, Paras Healthcare had appointed a banker to raise external funding.
In the single specialties segment, ADV Partners had invested $45 million in Dr Agarwals Healthcare last year.
Other recent transactions in the segment include IDFC Private Equity’s planned exit from Pune-based Sahyadri Hospitals and Multiples PE exiting its investment in Vikram Hospitals.
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