IHH buys India’s Global Hospitals for RM819m

KUALA LUMPUR: Malaysia’s IHH Healthcare Bhd is buying a 73.4% stake in India-based Ravindranath GE Medical Associates Private Ltd for RM819 million.
“This will be a game-changer for IHH in India. Together with our existing hospitals, the acquisition ... catapults us to becoming one of the leading hospital groups in India,” Tan See Leng, IHH managing director and chief executive, said on Friday.
He added that India has tremendous growth potential with its rapidly increasing demand for quality private healthcare.
IHH will inject RM169 million into the acquired business, known as Global Hospitals, to fund its capital expenditure requirements and optimise its borrowing cost.
Founded in 1999, Global Hospitals operates a chain of five hospitals with about 1,100 operational beds in Hyderabad, Bangalore, Chennai and Mumbai.
The number of operational beds is expected to ramp up to about 1,900 beds within the next five years.
IHH said the acquisition augments and complements its position among the leaders in the quaternary care segment.
IHH’s India portfolio comprises about 1,800 beds with potential to reach up to 4,000 beds in the next five years.
To better leverage brand equity and coordinate branding efforts, IHH plans to consolidate all of Global Hospitals facilities under IHH’s Gleneagles brand.
With its expanded presence in India, IHH aims to extract further business synergies, cost savings and operating leverage through centralised procurement, optimised backroom functions, common branding and marketing strategies, sharing of doctors and better utilisation of facilities.
“This deal signifies IHH’s continued commitment to expand in markets where there is strong, growing demand for quality healthcare. With this transaction, we remain confident in our ability to deliver sustainable, long-term value creation for our shareholders,” IHH chairman Tan Sri Dr Abu Bakar Suleiman said.
The acquisition of Global Hospitals boosts IHH’s beds globally to more than 8,000 across 45 hospitals in 10 countries. Pending necessary approvals and satisfaction of certain conditions, the deal is expected to close within three months.
CIMB Securities (India) Private Ltd and ICICI Securities Ltd were financial advisers on the deal.