KKR to assume control of Indian hospital operator Max Healthcare

Radiant – which sold a 49% interest to KKR in 2017 for approximately $200 million – will merge with Max Healthcare to create a business with an equity valuation of INR72.4 billion ($1 billion). The combined entity will operate over 3,200 beds across 16 hospitals, ranking as the country's third-largest hospital network by revenue and fourth-largest by number of beds.

Abhay Soi, who made his name as a financial restructuring specialist before taking Radiant into the healthcare space in 2010, will lead the new business as chairman.

The transaction will see Max India spin-out its non-healthcare assets – Max Bupa and Antara Senior Living – into a separately listed company. One share, valued at INR10, in this entity will be awarded for every five held in Max India. Radiant's existing assets will then be demerged into Max Healthcare, which will undergo a reverse merger with Max India. Shareholders in Max India will receive 99 shares, valued at INR10 apiece, in the merged entity for every 100 shares in Max India.

KKR will own a 51.9% equity stake in the business, while Soi and the Max Group promoters hold 23.2% and 7%, respectively. Most of the capital will come from KKR Asian Fund III, which closed at $9.3 billion in mid-2017.

"We are excited to back Radiant's efforts towards consolidation in the healthcare sector by helping them create an effective platform in India for the highest-quality healthcare service providers, best in class infrastructure, practices, doctors, and management teams," Sanjay Nayar, CEO of KKR India, said in a statement.

KKR expects demand for quality healthcare to outpace overall economic growth in India in the coming years. Given relatively low government spending on healthcare, private hospital operators will play a key role in meeting this demand. It underpins the investment theses of multiple PE firms looking to enter the space.

Radiant found initial success with the redevelopment of BLK Super Specialty Hospital, one of the largest private sector care facilities in the Delhi and National Capital Region (NCR). It has 650 beds and there are plans to add 200 more. In 2014, it took over the 350-bed Nanavati Super Specialty Hospital in Mumbai. Radiant is upgrading the facilities and wants to reach 800 beds within four years.

Max India owns 49.7% of Max Healthcare, which operates 14 hospitals – with approximately 2,400 beds – including 11 in the Delhi NCR. The company has over 3,000 doctors and 10,000 other employees, and it sees more than 2.2 million patients per year.

According to a Max India disclosure, Radiant generated INR8.2 billion in turnover for the 12 months ended March 2018 compared to INR17.9 billion for Max Healthcare.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Buyouts
• Healthcare
• India
• KKR