Blackstone has emerged the frontrunner to acquire Kims Healthcare Management (KHML), Kerala’s leading hospital chain, said two people aware of the development. The US private equity major is expected to acquire up to 75% holding in the hospital chain, valuing it at Rs 4,000 crore, they said. Initially, Blackstone is aiming to buy 55% stake held by existing investor True North along with 20% stake held by minority shareholders, they said. The deal is likely to be signed by mid-September.
The management will remain the same, headed by founder Dr MI Sahadulla who along with his family holds about 25% stake in Kims, the sources said. Blackstone and Manipal Health Enterprises are the two contenders left in the race for Kims. Manipal was keen on acquiring up to 90% stake with Sahadulla to remain as a minority shareholder with 10% stake, people cited above said.
Manipal Health Enterprises, Max Healthcare, Temasek-owned Sheares Healthcare, and global buyout funds Blackstone and CVC Capital were among half a dozen potential buyers in initial talks to acquire about 65-70% in Kims Health Management, ET first reported in December.
Kims Health has four operational hospitals in Kerala — in Thiruvananthapuram, Kottayam, Kollam and Perinthalmanna — with a total capacity of 1,378 beds.
KHML was set up in 2002 by a group of professionals in Trivandrum, led by Dr Sahadulla, the founder chairman and managing director. It is a tertiary care hospital with 40 specialty departments. The company also operates three medical centres and a nursing college in Thiruvananthapuram.
Spokespersons of Blackstone, Manipal Health and True North declined to comment. So did Sahadulla. In 2017, True North had invested about $200 million in Kims to acquire a 40% stake held by existing investors — Ascent Capital Advisors & OrbiMed Advisors. There was also primary capital infusion to fund growth plans. For FY23, Kims posted a revenue of Rs 1,200 crore and Ebitda of Rs 230 crore, people aware of the results said. It had posted a revenue of `826 crore in FY22.
Kims Health’s Thiruvananthapuram facility contributed 72% to its operating income and 82.8% to its operating profit in FY22.
The company has a revenue mix from diverse specialties.
Source: Economic Times