The Ontario Teachers’ Pension Plan Board said it has agreed to acquire a significant majority stake in the Sahyadri Hospitals chain from the Everstone Group in the Canada-based investor’s first control private equity buyout in India.
Everstone and Sahyadri Hospitals’ key management and founders will continue to retain minority stakes in the healthcare firm, said Ontario Teachers’ in a statement without disclosing the financial details of the transaction.
The deal is expected to be completed by the end of this year, it added.
VCCircle reported in August last year had reported that Everstone had initiated the process to exit Sahyadri Hospitals just a little over two years after its investment in the company. Everstone had agreed to acquire a controlling stake in Sahyadri in April 2019. The transaction was concluded later in the year.
Founded by neurosurgeon Charudutt Apte in 1994, Sahyadri Hospitals has eight hospitals with 900 operating beds and 300 critical-care beds in Maharashtra, concentrated in Pune city.
The healthcare company aims to grow its bed capacity by over 500 in the next five years, the statement said.
The hospital chain clocked nets sales of ₹544 crore in fiscal 2020-21 compared with ₹467 crore a year ago, according to VCCEdge, the data and intelligence platform of VCCircle. Operating profit rose to ₹130 crore from ₹84 crore in the previous year.
Sahyadri Hospitals previously counted homegrown private equity firms IDFC Alternatives and ICICI Venture as its investors.
Raju Ruparelia, senior managing director, private capital, Asia-Pacific at Ontario, said the investor believes that it can leverage its significant global experience in the healthcare sector to help scale Sahyadri Hospitals into a national healthcare provider in the coming years.
Ontario had net assets of C$242.5 billion as of 30 June. It has investments in more than 50 countries across equities, real estate, infrastructure and also provides venture growth capital.
In its recent India bet, Ontario committed $175 million to boost alternative investment company KKR & Co’s road platform in April. The transaction marked its third infrastructure investment in India following purchase of 25% stake in the National Highways Infra Trust late last year and an anchor investment in the National Investment & Infrastructure Fund (NIIF).
According to a VCCircle analysis in May, several private equity firms are preparing to exit hospital investments to capitalise on the easing of the coronavirus pandemic and a rebound in businesses in their portfolios.
Earlier this week, private equity giant KKR sold its entire estimated stake of 27% in hospital chain Max Healthcare Institute for around ₹9,400 crore via block deals.
In another recent transaction in India, TPG-backed Care Hospitals acquired a “significant majority” stake in Aurangabad-based United Ciigma Hospital in its third acquisition since April.