Private equity firm CX Partners said it has picked up a controlling stake in Sabine Hospital and Research Centre, a Kerala-based fertility services, mother and child care provider, for $50 million, or about Rs 420 crore. Sabine Hospital said it will use the proceeds to open more infertility treatment centres in Kerala and neighbouring states.
It currently has a 200-bed flagship hospital in Muvattupuzha in Ernakulam district and a 100-bed centre in Thiruvananthapuram. It plans to open at least six centres across Kerala in the next six-eight months, and double its bed capacity to 600 beds.
The companies did not share the exact stake CX Partners has bought or the post-funding valuation of Sabine Hospital.
Founded in 2010, Sabine’s Muvattupuzha Hospital draws couples from across Kerala for IVF treatment that helps individuals or couples get pregnant.
“We want to replicate the same model which have in Muvattupuzha – affordable, integrated mother and child care – to other areas of Kerala, and then to Tamil Nadu, Karnataka, and later pan-India,” said Sabine Sivadasan, who is the founder and chairman of Sabine Hospital.
On an average, Sabine does about 500-600 IVF cycles per month, or about 42%-45% of all IVF procedures in Kerala.
“Fertility is a growing medical need…Sabine Hospital has taken market leadership in Kerala through patient-centricity, accessibility and affordability,” said Vivek Chhachhi, managing partner of CX Partners. “While doing that, it has delivered good financial performance, so the CAGR in revenues of the last three years is 25%, with profit growth slightly faster at 32%…We think the model is good for patients. We are hoping that with the growth capital, Sabine Hospital will grow over 30% revenue.” CX Partners focuses on high-growth mid-market companies. Its prior portfolio companies in healthcare include Natco Pharma, Thyrocare Technologies and Healthium Medtech.
PE firms are eyeing controlling stakes in fertility chains, as infertility rates in India are estimated to be around 15% and they are expected to rise, driven by lifestyle changes such as poor diets, stress levels and pollution, along with rising education levels and marriage age.
India does around 300,000 IVF cycles annually, and over the next decade, the number of cycles done across the country is expected to grow around 15% annually.
The requirement of regulatory compliance is also aiding consolidation in the assisted reproductive technology (ART) sector.
In July last year, Baring Private Equity Asia (BPEA) EQT acquired a controlling stake in the country’s largest fertility chain, Indira IVF, for around Rs 6,000 crore, valuing the IVF chain at about Rs 9,000 crore.
Another large fertility chain, Nova IVI Fertility is owned by Asia Healthcare Holdings (AHH), a healthcare operating platform founded by PE firm TPG Growth.
Source: Economic Times