KKR launches late bid for Trehan’s Medanta – ( Trehan’s cashing out as the government was tightening the screws ( Ratul Puri )and its a good time family man Kamal Nath is a CM and everyone busy with elections , sneak a deal , PGH has it been factored in the equation – Clinical establishment act )

Posted on Apr 6 2019 - 5:19am by admin

Manipal Still In Fray, But Not In ‘Exclusive’ Talks
Madhav Chanchani & Boby Kurian TNN

Mumbai:

Storied American investor KKR has mounted a surprise bid to acquire heart surgeon Naresh Trehan-promoted Medanta hospitals, even though the consortium of billionaire Ranjan Pai-led Manipal Hospitals and its backer TPG Capital remains in the fray.

The turn of events comes after the expiry of the exclusivity period agreement between Manipal-TPG and Medanta, people directly aware of the matter said. The Manipal consortium, which included Singapore’s Temasek Holding, was expected to clinch the deal at around Rs 6,000 crore, or a valuation of $850-900 million.

The KKR bid will be routed through its healthcare platform Radiant Life Care, promoted by investor cum entrepreneur Abhay Soi, which is also in the midst of buying out Max hospitals in Delhi. Radiant also operates BL Kapoor and Nanavati hospitals in Delhi and Mumbai respectively.

KKR swooped down with a late bid after Manipal’s negotiations ran into valuation differences. “The ebitda (or operating profit) of the company is not what was expected, which has created a valuation mismatch,” said one of the sources. This comes even as the stock market valuation multiples for the healthcare services industry declined significantly, due to the government’s move to improve price restrictions on certain procedures and implants.

When contacted, KKR and Manipal declined to comment on the developments.

The Bengaluru-headquartered Manipal group, which was also in the fray to acquire Fortis Healthcare that finally went to Malaysia’s IHH, had arranged structured funding of about Rs 3,500 crore from investment major Blackstone to finance the acquisition. Temasek, which holds stakes in both Medanta and Manipal, is trying to act as a mediator between major shareholders of both the companies to push the deal through. KKR-backed Radiant Life’s ongoing acquisition of Max Healthcare would result in a reverse listing of the business. The merged entity of Max and Radiant, where KKR will own about 52% stake, is expected to operate 3,200 beds in 16 hospitals across the national capital region and in Mumbai.

Medanta owner Global Hospitals reported a 3.5% increase in revenues to Rs 1,392 crore during the year ending March 2018, while profit after tax fell to Rs 33 crore from Rs 51 crore, according to a credit analysis by rating agency Crisil.

Trehan, along with his cofounder Sunil Sachdeva, owns 55% in Medanta, while private equity firm Carlyle, which bought into the company at Rs 3,600-crore valuation in 2013, owns 27% stake. .

https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/PrintArticle.aspx?doc=TOIDEL%2F2019%2F04%2F05&entity=ar01905&ts=20190405004648&uq=20190404085623&mode=text

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