Blackstone makes health care foray with $1 bn deals, buys Care Hospitals

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US-based private equity major Blackstone said on Monday it had completed the acquisition of a 72.5 per cent stake in Quality Care India Ltd (QCIL), which operates a network of Care Hospitals, from Evercare, a platform backed by TPG Rise funds. This marks Blackstone’s foray into India’s health care services sector.


TPG will continue to hold the remaining stake of 27.5 per cent in QCIL. With QCIL valued at Rs 6,600 crore ($800 million), the deal is estimated at about Rs 4,800 crore ($580 million).


In a separate deal, QCIL has signed a definitive agreement to acquire around 80 per cent in KimsHealth, a Thiruvananthapuram-headquartered quaternary care hospital network offering end-to-end healthcare services. The valuation of KimsHealth is estimated at Rs 3,300 crore ($400 million).


Blackstone’s overall commitment, including its investment in QCIL and KimsHealth, is estimated to be around $1 billion, industry sources close to the development said.


KimsHealth runs four hospitals in Kerala with around 1,400 beds.


Dr MI Sahadulla, chairman and managing director of KimsHealth, would continue to hold around 20 per cent in the hospital chain, and also continue to run the business.


The acquisition of Care Hospitals by Blackstone and, in turn, of KimsHealth by Care Hospitals would create one of India’s largest hospital platforms spread over 11 cities, with 23 facilities and 4,000 beds.

Aster DM India and Fortis Healthcare roughly operate around 4,000 beds each, while Apollo Hospitals Enterprises and Manipal Hospitals have over 9,000 and 8,000 operational beds, respectively.  

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Ganesh Mani, managing director, Blackstone PE, said, “We are pleased to make Blackstone’s first investment in India’s healthcare services sector and partner with TPG to create one of the largest healthcare platforms in India.” Blackstone, he added, wanted to grow the platform organically as well as through acquisitions.


Media reports suggested that Blackstone beat contenders like Max Healthcare and Temasek-backed Manipal Hospitals to acquire KimsHealth.


KimsHealth posted revenues of Rs 967.6 crore in 2022-23, growing at 16 per cent year-on-year, while its earnings before interest, taxes, depreciation, and amortisation (Ebitda) stood at Rs 186.7 crore, up 26 per cent. Profit after tax grew 39 per cent to Rs 141.9 crore.


Ankur Thadani, partner at TPG, said they were excited to partner with Blackstone to continue their efforts and journey in building Care Hospitals Group with networks across India and South Asia.

 


Sahadulla said the partnership with global players would strengthen their capabilities and help the business enter its next phase of growth. “We at KimsHealth thank all our minority investors for their trust over the last 21 years and are proud to have created a successful exit event for them,” he added.


True North will sell its entire stake in KimsHealth as part of the transaction.


The combined platform will deliver care in more than 30 clinical specialties, including cardiac sciences, oncology, neurosciences, renal sciences, orthopedics, gastroenterology, and integrated organ transplant.

Barclays and Rothschild acted as financial advisors to TPG on the Care Hospitals transaction. ICICI Securities advised KimsHealth and its shareholders. o3 Capital advised Blackstone on the Care Hospitals deal. Shardul Amarchand Mangaldas acted as legal advisors for TPG and KimsHealth, Desai Dewanji advised True North, and Trilegal advised Blackstone.


Deal Dynamics

 


Quality Care India Ltd (QCIL), valued at Rs 6,600 crore, runs Care Hospitals network


Blackstone completes acquisition of 72.5% of QCIL from Evercare, backed by TPG


QCIL to acquire 80% stake in KimsHealth, valued at $400 million (about Rs 3,300 crore)


Blackstone’s total commitment for both deals – QCIL and KimsHealth — is $1 bn

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