Renowned cardiologist Dr. Devi Shetty founded multi-speciality hospital chain Narayana Hruduyalaya is on the prowl to bolster its footprint in the domestic healthcare services market. ET NOW learns from multiple sources privy to ongoing discussions that the Bangalore, Karnataka headquartered firm is in advanced talks to buy out Delhi-based drugmaker Panacea BiotecBSE 2.38 %’s multi-super-speciality hospital located in Gurgaon, Haryana.
“The deal makes strategic sense for Narayana Hruduyalaya as it is traditionally strong in the southern and eastern regions and this potential deal will strengthen its presence in the northern market where there are high growth opportunities,” said one of the sources cited above. In June 2016, Keseven Venugopal, the CFO of Narayana Hruduyalaya told the Economic Times that acquisition targets for the company would be “location specific and complementary to its greenfield expansion.”
“The Gurgaon hospital has been on the block for a while now and Panacea Biotec is looking to reduce its debt via this potential transaction. The deal is likely to be struck for around Rs 180-Rs 190 crores and an official announcement is expected in March 2017 ,” added another source familiar with the ongoing discussions. Panacea Biotec’s debt burden stood at around Rs 930 crores as of FY 16.
The 224 bed Gurgaon Hospital has been set up through Panacea Biotec’s subsidiary NewRise Healthcare Private Limited in which the company holds 87.4% stake. Asia’s largest vaccine maker Serum Institute of India backed by the Poonawala family owns around 14 % stake in Panacea Biotec.
“The healthcare sector continues to grow over 15%. The sector has also seen come consolidation and buyout activity in recent times and this trend is expected to continue as the sector prepares for the next wave of growth,” says Sanjeev Krishan, Transaction Services & Private Equity Leader, PwC.
