Temasek is set to make an investment of about ₹13,200 crore ($1.6 billion) to buy an additional 33% stake from existing investors of Manipal Health and its promoters, the Pai family, valuing the chain at about ₹40,000 crore.
Buyout group KKR & Co, till recently the frontrunner to make an investment, has decided to opt out of the negotiations, the people said.
Of the existing investors in Manipal Health, private equity fund TPG Capital Management would sell 10% from its 22% stake, while National Infrastructure Investment Fund (NIIF) would sell its entire 8%, said the people, who spoke on the condition of anonymity as the talks are in private domain.
The Pai family, which founded India’s first privately owned medical college in Karnataka’s Manipal in 1953, would dilute about 15% from their 52% stake. The documentation process is ongoing and the deal is likely to be signed by next month, the people added.
Spokespeople for Manipal Health, Temasek and TPG declined to comment, while emails sent to NIIF did not elicit any response.
Public Offer Under Consideration
KKR spokesperson declined to comment.
KKR was in discussions to purchase the 48% stake held by the non-promoter investors in Manipal Health for nearly $2.1 billion (around ₹17,250 crore), valuing the South-based hospital chain at about ₹36,000 crore. It was also negotiating with the Pai family for buying a minority stake and ending up owning about 52%, ET reported in October. On September 20, ET reported that KKR and Temasek were the frontrunners to buy TPG’s stake in Manipal Health.
TPG invested $146 million in Manipal Health in 2015 and was the first to start a formal process to exit from the hospital chain.
NIIF invested ₹2,100 crore in Manipal Health through its Strategic Opportunities Fund in April last year. The fund was not very keen to exit initially, but decided to sell its stake as the valuation is attractive.
In November 2020, Manipal Health had acquired the Indian assets of Columbia Asia Hospitals for around ₹2,100 crore and in June 2021, it bought out Bengaluru-based Vikram Hospitals from Multiple Private Equity for around ₹350 crore.
The Manipal group, which has nearly 8,700 beds across 28 hospitals, is also exploring a public offer. Manipal Health is expected to post ₹1,400 crore of earnings before interest, tax, depreciation and amortisation on revenue of ₹7,000 crore in the ongoing fiscal 2023, said the people ET spoke to.
