Private equity investors NY Jacob Ballas, Siguler Guff & Co and International Finance Corporation, whose exit from diagnostics company SRL Ltd was stalled after a legal setback, have started the process of selling their combined 31.5% stake by September end, said two people involved in the deal.
Malaysia’s IHH Healthcare, which originally planned to buy out their holdings after its acquisition of Fortis HealthcareNSE 0.78 %, the parent company of SRL, is facilitating the transaction, one person said.
“The three PE firms expect to sell their combined holding for about Rs 1,250 crore, resulting in a total valuation of Rs 3,600-4,000 crore for SRL,” said one person.
The three investors have appointed Kotak Mahindra Capital as the merchant banker for the deal, the people said.
Two other investors — Axis Bank (5.5%) and the family of Gurinder Singh Dhillon of Radha Soami Satsang Beas (5%) — may exit the diagnostics company if they get the same terms as the buyers of the three PE firms’ stakes, the person said.
“However, it’s very unlikely that IHH would facilitate the exit of these two investors,” said one person.
IHH Healthcare, which had proposed to buy out the PE firms following its acquisition of Fortis, couldn’t proceed with the plan after the Supreme Court stayed its open offer for Fortis Healthcare shares on a plea by Daiichi Sankyo. The Japanese drug maker is seeking implementation of an arbitration award payable by the former Fortis promoters.
Stuck in a legal logjam, IHH decided to help the PE firms sell their stakes and provide comfort to incoming investors in terms of board positions and exit routes such as listing or buyback, the person said.
The PE firms are looking at financial investors and not strategic partners because Fortis Healthcare and IHH Healthcare are expected to play a dominant role in the management of SRL, the people said.
The PE firms are looking at financial investors and not strategic partners because Fortis Healthcare and IHH Healthcare are expected to play a dominant role in the management of SRL, the people said.
“We do not have the ability to comment on the future, which is beyond human comprehension,” said Srinivas Chidambaram, CEO of Jacob Ballas.
An IFC spokesperson declined to comment on the matter. Spokespersons for Fortis Healthcare, Kotak Mahindra and Siguler Guff didn’t respond to queries at the time of going to press.
IHH Healthcare acquired Fortis Healthcare and completed the deal in November 2018, buying a 31.1% stake through a preferential allotment of shares. IHH infused Rs 4,000 crore into Fortis to stabilise the business, but an additional Rs 3,400 crore put into an escrow account to initiate the open offer is stuck due to the Supreme Court-ordered status quo on the IHH-Fortis deal in December.
Source: Economic Times