PE fund Blackstone-owned hospital platform Quality Care (QCIL) has signed an agreement to acquire KIMS Health Management (KHML), Kerala’s leading hospital chain, valuing the business at ₹3,300 crore ($400 million), said multiple people aware of the development.
QCIL, the platform that operates a network of CARE Hospitals, is jointly owned by Blackstone and TPG Growth. Blackstone owns 73% stake while TPG Growth holds 25% stake in QCIL.
After the KIMS buyout, QCIL will own close to 3,800 beds, making the entity the fourth largest hospital group after Apollo Hospitals, Manipal Health and Fortis Healthcare.
QCIL has acquired 80-85% stake in KIMS, while KIMS’ founder promoter Dr MI Sahadulla will hold 15-20% stake and will continue to run the hospital business.
ET first reported on August 14 that Blackstone is the frontrunner to acquire KIMS Health Management, valuing it at ₹4,000 crore. Manipal Health Enterprises was the other contender left in the race for KIMS.
QCIL acquired 55% stake held by existing investor True North along with 20% stake held by minority shareholders. Sahadulla & family have diluted additional stake in this transaction, added sources.
KIMS Health has four operational hospitals in Kerala – Trivandrum, Kottayam, Kollam and Perinthalmanna – with a total capacity of 1,378 beds. Its 300-bed hospital in Nagercoil will be operational by March 2024.
KIMS is expected to post Earnings Before Interest, Taxes, Depreciation, and Amortisation of ₹300 crore and a revenue of ₹1,000 crore in FY24, said sources.
In May, Blackstone acquired about 73% stake in QCIL from TPG Growth-backed Evercare, valuing the chain at $800 million (₹6,600 crore). TPG Growth still owns a 25% stake in QCIL. Other contenders who were in the race for CARE were Singapore government owned Temasek Holdings, CVC Capital and Max Healthcare.
CARE acquisition was Blackstone’s debut investment in the Indian healthcare sector, which also gave the US fund a presence in the South Asia healthcare market. CARE has 15 hospitals in India and two in Bangladesh.