Manipal Health Enterprises is in the final stages of acquiring Emami Group’s healthcare business, AMRI Hospitals, for ₹1,700-1,800 crore. The deal was delayed by over a year due to differences in valuation and some pending paperwork of AMRI related to the properties, three senior industry executives said. The executives said the deal is in its final lap of due diligence and the paperwork was now being executed with an announcement expected in the next few weeks.
AMRI runs four multi-speciality hospitals – 3 in Kolkata and one in Bhubaneswar – with more than 1,150 beds. Emami Group will continue to own a diagnostic centre in Kolkata, which is not part of this deal, and it may later look for a buyer for that business.
The executives said over 90% of the deal proceeds will help the Emami promoters retire the debt they took for the hospital business and also for the debt which AMRI Hospitals has on its books.
This deal will help the promoters reduce their pledge in the group’s flagship FMCG firm, Emami. As of December 2021, the promoters pledged 29.13% of their shareholding in Emami. The promoters hold 53.86% in the FMCG company which owns popular brands like BoroPlus, Fair and Handsome and Zandu
In an analyst call last month, Emami director Mohan Goenka said the promoters will reduce their pledge after selling some other assets in the next 2-3 quarters. While Emami did not respond to an email, Manipal declined to comment. Allegro Capital Advisors is advising Manipal, while Emami is advised by Avendus Capital.
Emami and Manipal had been negotiating since last year when Manipal was not agreeing to buy the assets for more than ₹1,500 crore, while Emami had valued it much higher. Emami Group owns 98% in AMRI Hospitals, while the West Bengal government owns the balance 2%.
The promoters have been trying to sell AMRI Hospitals since 2018 to focus on the flagship FMCG business including edible oil, and reduce their overall debt, but the pandemic delayed the process.
Manipal already owns 27 hospitals with more than 7600 beds, as per its website. Last year, Manipal acquired Columbia Asia Hospitals for Rs 2100 crore, becoming a strong number two player after Apollo Hospitals. Manipal also has plans to float an initial public offer (IPO).
