IHH buys PE-backed Global Hospitals for $194m
IHH Healthcare has agreed to buy India's Ravindranath GE Medical (RGE), which operates five hospitals under the Global Hospitals brand, for INR12.8 billion ($194 million) in cash.
Malaysia-based IHH will acquire a 73.4% stake in RGE through its wholly owned subsidiary Gleneagles Development. After the purchase, IHH will consolidate the Global Hospitals branches under the Gleneagles brand, according to a statement. Part of the transaction includes a commitment by IHH to use INR2.7 billion to fund RGE's capex requirements and optimize its cost of borrowing.
Global Hospitals, founded in 1999 by surgeon K. Ravindranath, is one of India's leading private hospital chains, specializing in gastroenterology, neuroscience, and liver and bile duct disorders. The company is backed by several PE firms, including Everstone Capital, which paid $31 million for a 25% stake in 2007. In 2013, the International Finance Corporation and Sabre Partners invested $25 million and $15 million, respectively.
It has not been disclosed how or whether IHH's investment will affect the stakes of the other shareholders.
IHH operates more than 40 hospitals worldwide in both emerging markets, including Malaysia, China, India and Iraq, as well as developed countries such as Hong Kong and Turkey. It is the world's second largest healthcare company by market capitalization, and employs more than 25,000 people.
Originally founded by Malaysian sovereign wealth fund Khazanah Nasional, IHH has previously received backing from Abraaj Capital, which paid $342 million for a 7.1% stake in 2011. Abraaj later fully exited its stake in IHH's 2012 IPO.
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