Quality Care India Limited (QCIL), a hospital platform owned by private equity fund Blackstone, has entered into an agreement to acquire KIMS Health Management (KHML), a prominent hospital chain of Kerala. The deal values KHML at INR 3,300 crore (USD 400 million).
QCIL, which operates the CARE Hospitals network, is jointly owned by Blackstone and TPG Growth. Blackstone holds a 73 per cent stake in QCIL, while TPG Growth owns 25 per cent.
Following the acquisition of KIMS, QCIL will possess nearly 3,800 beds, making the organization as the fourth largest hospital group after Apollo Hospitals, Manipal Health, and Fortis Healthcare.
QCIL has secured an 80 to 85 per cent stake in KIMS, with Dr. MI Sahadulla, the founder and promoter of KIMS, retaining a 15-20 per cent stake and maintaining the responsibility for the hospital's operations.
Back in August, there were widespread speculations regarding Blackstone leading the way to acquire KIMS Health Management, marking the valuation at INR 4,000 crore. Manipal Health Enterprises was the other competitor in the race.
QCIL has acquired the 55 per cent stake previously owned by the current investor True North, in addition to the 20 per cent stake held by minority shareholders. Furthermore, Sahadulla and his family have opted to dilute more of their stake as part of this transaction.
KIMS Health currently operates four hospitals in Kerala, situated in Trivandrum, Kottayam, Kollam, and Perinthalmanna, providing a combined capacity of 1,378 beds. Additionally, a 300-bed hospital located in Nagercoil is anticipated to begin operations by March 2024.
KIMS is expected to achieve Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of INR 300 crore and generate a revenue of INR 1,000 crore for the fiscal year 2024.
In May, Blackstone successfully acquired approximately 73 per cent of Quality Care India Limited (QCIL) from Evercare, a TPG Growth-backed entity with a transaction value of USD 800 million (INR 6,600 crore). TPG Growth retained a 25 per cent ownership stake in QCIL. Notably, Blackstone faced competition in the bid for CARE from prominent entities such as Temasek Holdings, CVC Capital, and Max Healthcare.
The acquisition marked Blackstone's entrance into the Indian healthcare sector, enabling the US-based fund to establish a presence in the South Asian healthcare market. CARE operates a network of 15 hospitals across India, in addition to two hospitals located in Bangladesh.
Meanwhile, ahead of World Stroke Day on October 29, KIMS Health has initiated a week-long Stroke Awareness Campaign, led by the hospital's Neurology Department. Dr. MI Sahadulla, Chairman, and Managing Director of KIMS Health, emphasized the importance of time in stroke management, highlighted that prompt and specialized treatment plays a crucial role in effectively addressing the condition.
