Meenakshi Mission Hospital looking at Chennai hospital acquisition

Industry: Healthcare 2016-10-26

CHENNAI: Madurai-based healthcare group Meenakshi Mission hospital is negotiating with a Chennai-based hospital for an estimated Rs 250-crore acquisition. The final cost of acquisition could go higher.

The acquisition of the hospital, with 250 beds, will mark Meenakshi Mission’s entry from the tier-2 city of Madurai into the Chennai healthcare market after expanding to Thanjavur from home turf of Madurai, where it runs a 1000-bed hospital apart from a nursing college and research center. The hospital also runs a thriving telemedicine network in the southern parts of the state.

“We are still negotiating. It is some weeks before we could get to the stage when the term sheet is signed. But, definitely, we are looking to buy a hospital in Chennai,” S Gurushankar, managing trustee and vice-chairman of Meenakshi Mission Hospital and Research Centre, told ET, refusing to divulge the identity of the hospital targeted for acquisition. Along with the Chennai hospital, the group is building two hospitals from scratch in Salem and Thanjavur, each for a consideration of Rs 250 crore.

Meenakshi Mission would raise the funds chiefly through internal accruals and some debt. Gurushankar also added that the hospital chain will also look at taking the 3-decade-old venture public in about four years.

While it has had a thriving business in Madurai and Thanjavur, Meenakshi Mission would have to brace for competition from established healthcare chains such as Apollo and Fortis as it sets foot in the Chennai market. Gurushankar believes the unique selling point is that the hospital chain has its doctors working for it exclusively, unlike the prevalent practice among doctors of consulting across many hospitals. This is expected to provide the patients with a uniform level of treatment throughout their stay in the hospital.

Meenakshi Mission Hospital was raided by officials of the income tax department recently along with properties of two well-known politicians and a diamond retail store for suspected tax evasion. The income tax office is still conducting investigations, according to senior officials with the investigation wing of the tax department.