IFC to exit India's Max Healthcare for $66m
The International Finance Corporation (IFC), the investment arm of the World Bank, will exit its entire stake in Indian hospital chain Max Healthcare for INR4.2 billion ($65.6 million).
IFC holds about 40.3 million shares in Max Healthcare, which it will sell equally to Max India and South African hospital chain Life Healthcare Group for INR105 per share, according to a release. Each company currently holds a 46% stake in Max Healthcare, which will increase to 49.7% following the transaction.
Max Healthcare is the flagship asset of Max India, the holding company for the former health and associated businesses verticals of the Max Group. The company operates 14 hospitals across India with a total of over 2,500 beds.
“We remain committed to providing the capital the business needs to continue on its growth trajectory,” said Rahul Khosla, chairman of Max India and Max Healthcare. “Max Healthcare’s key specialties, including neurosciences, oncology, cardiac and renal sciences continue to report strong growth, and we are excited about the growth potential from our new growth initiatives, such as oncology day care, digicare and Max Labs.”
Max Group comprises Max India along with Max Financial Services, which controls Max Life Insurance, and manufacturing unit Max Ventures & Industries. In its first annual report since the spin-out of Max Life and Max Ventures, Max India reported INR651 million in revenue for the period from January 2015 to March 2016, with net profit over the same period coming to INR143 million.
IFC first invested in Max Healthcare in 2007, committing $67 million for an undisclosed stake. Further investments followed in 2009 and 2010. The development finance institution (DFI) made a partial exit for an undisclosed amount in 2014. Warburg Pincus was also an investor in Max Healthcare until it sold its stake to Max India in 2014 for INR1.4 billion.
Life Healthcare has been an investor since 2011, when it bought a 26% stake for INR5.2 billion ($104 million). A $132 million investment in freshly issued shares in 2014 raised its stake to equal that of Max India.
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