KKR makes $1.2b exit from Indian hospital chain
KKR has exited its entire interest in Indian hospital operator Max Healthcare Institute – nearly four years after assuming control of the business by merging it with an existing portfolio company – with proceeds of approximately INR 91.9bn (USD 1.15bn).
The private equity firm offloaded 260.2m shares through two block trades of equal size on August 16, priced at INR 353 per share, according to exchange data. KKR owned 48.64% – or 469.8m shares – of Max Healthcare as of March 2021. This position was gradually sold down before the firm completed its exit by offloading the remaining 27.5% through the block trades.
Max Healthcare’s stock ended August 12 at INR 361.55 and then, after the markets were closed due to a public holiday on August 15, climbed 9.7% on August 16 to close at INR 396.70. It fell back to INR 387.10 the following day, giving the company a market capitalisation of around INR 384.6bn.
KKR’s journey began in 2017 with the acquisition of a 49% interest in Radiant Life Care for about USD 200m. The investment effectively created a partnership between the private equity firm and Abhay Soi, a financial restructuring specialist who took control of the company in 2010 and proceeded to buy up hospitals under a refurbishment and improvement thesis.
Radiant Life agreed to merge with Max Healthcare in late 2018, creating an entity with an equity valuation of INR 72.4bn and more than 3,200 beds across 16 hospitals. It ranked as India’s third-largest hospital network by revenue and fourth largest by number of beds.
KKR took a 51.9% stake in the business, with Soi and the Max Group promoters holding 23.2% and 7%, respectively. Soi continues to own 23.09% as the sole promoter.
Max Healthcare currently operates 17 hospitals with more than 3,400 beds across the Delhi and National Capital Region, Haryana, Punjab, Uttarakhand, and Maharashtra. It also has homecare and pathology businesses. The company employs around 15,000 people, including 4,800 clinicians.
In the 12 months ended March 2021, 550 transplants, 23,700 cardiac procedures, 13,300 orthopaedic surgeries, 7,600 neuro surgeries, 7,500 oncology surgeries, and 160 robot surgeries were completed at Max Healthcare hospitals. In addition, more than 33,000 patients were treated for COVID-19 in hospitals and a further 2,800 at home.
Revenue for the period came to INR 38.8bn, down from INR 43.6bn a year earlier. EBITDA rose from INR 5.9bn to INR 6.4bn, while the company swung from a net profit of INR 1.3bn to a net loss of INR 950m.
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