Actis invests in Sri Lankan hospital chain
Emerging markets-focused private equity firm Actis has invested $32 million for approximately 30% of Asiri Hospital Holdings (AHH), Sri Lanka’s largest private hospital group. The company operates three facilities in Colombo and two in Matara, with a total of 604 beds.
According to a regulatory filing, Actis has bought 209.8 million shares at LKR10.80 per share by way of a private placement for a total consideration of LKR2.26 billion ($17.2 million). This equates to a 19.09% stake. The acqusition takes the PE firm's overall holding to 280.7 million shares, or a 25.5% share of the voting rights.
Ashok Pathirage, Asiri's CEO, told The Financial Times that Actis would buy a further 10% stake from existing shareholders. Sri Lankan conglomerate Softlogic remains the largest shareholder, with 51%.
AHH claims to operate under four brands: Asiri Hospital, Asiri Surgical Hospital, Asiri Hospital Matara and The Central (a new offering, known in some places as Asha Central Hospital, which replaced Central Hospital in 2010). Some of the assets are held by two listed subsidiaries, Asiri Surgical Hospital and Asiri Central Hospitals.
The proceeds of Actis' investment will be used to help consolidate these holdings under AHH. AHH has agreed to acquire equity interests held by Asiri Surgical Hospital in Asiri Central Hospitals and Central Hospital, totaling 7.3 million shares and 15.9 million shares, respectively. The remainder will be used to increase its holdings in Asiri Central and Asiri Surgical and reduce debt levels across the entire group of companies.
In August, Actis purchased a 10.8% stake in Asiri Central Hospitals for LKR604 million ($4.5 million) from Softlogic, Commercial Bank of Ceylon and Pan Asia Banking Corporation.
"The rise of lifestyle diseases and increasing household income has created demand for high-quality healthcare provision which supplements government led services. Asiri is a premium private healthcare provider with an excellent reputation, carefully built-up over many years by its management team, led by Ashok Pathirage," said J.M. Trivedi, head of South Asia at Actis, referring to the most recent investment.
Actis' South Asia team has gained extensive experience in the healthcare sector with investments in the largest hospital chain in Gujarat, Sterling Add-Life, clinical research company Veeda, and India's leading generic pharmaceutical company, Glenmark Pharmaceuticals.
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