Fortis Hospitals on Tuesday announced the merger of its hospital business with Manipal Hospitals.
As reported by DNA Money earlier this month, TPG Capital Asia will infuse capital into Manipal Hospitals to acquire the stake into the troubled hospital chain of Singh brothers.
“The Board of Directors of Fortis Healthcare Limited has approved the demerger of its hospitals business (“Fortis Hospitals”) into Manipal Hospital Enterprises Private Limited today. The Board has also approved sale of its 20% stake in SRL Limited to Manipal Hospitals. The resultant entity Manipal Hospitals will be a publicly traded company listed on NSE and BSE. The remaining Fortis Healthcare will be an investment holding company with 36.6% stake in SRL,” read a statement released by Fortis Healthcare.
As part of the proposed transaction, Dr Ranjan Pai and TPG will invest Rs 3,900 crore into Manipal Hospitals. The funds will be utilised by Manipal Hospitals to finance the acquisition of 50.9% stake in SRL (20% from Fortis Healthcare and 30.9% from other investors for which discussions are currently underway).
In addition, the investment will support the proposed acquisition of hospital assets owned by RHT Health Trust and the growth of the hospitals and the diagnostics businesses.
Commenting on the transaction, Bhavdeep Singh, CEO of Fortis Healthcare said, “Much has transpired over the past 12 -18 months at Fortis and in the healthcare industry at large; it’s now time to get back to working with our doctors and nurses to saving and enriching lives. We believe Manipal has built a terrific franchise and team and the coming together of our two organisations will be transformational for the healthcare industry.”
Dr Ranjan Pai, Chairman of Manipal Education and Medical Group (of which Manipal Hospitals is a part) said, “The companies make a compelling strategic fit in terms of complementary geographies, clinical strengths as well as a shared commitment to providing outstanding patient care. As the largest hospital operator in India, this will be a platform benefiting all, from the communities we serve, to our capable employees and our investors. We have an excellent opportunity to leverage this strength to expand coverage and service delivery, in response to the burgeoning demand for world class healthcare.”
