*It is the first significant overseas acquisition by an Indian firm in the healthcare services space.*
Fortis Healthcare Ltd (owned by former promoters of Ranbaxy) is acquiring 23.9% stake in Singapore-based healthcare services firm Parkway Holdings from private equity biggie TPG Capital for around $685 million. The deal apparently has been struck at 14% premium to the value of TPG’s stake as of closing price of Singapore Stock Exchange listed Parkway, as per VCCircle estimates. Other big investors in Parkway include Khazanah Nasional, the sovereign wealth fund of Malaysia, that is the second largest shareholder of Parkway with 23.32% stake. Besides being the first significant overseas acquisition by an Indian firm in the healthcare services space, this deal is also the largest outbound deal by an Indian company since 2008. The big outbound deal announced was Oil and Natural Gas Corp. Ltd’s $2.6 billion (Rs 12,428 crore) takeover of Russia-focused Imperial Energy Corp. Plc in August 2008. Parkway Holdings Limited is one of the region's leading providers of healthcare services, with a network of 16 hospitals with more than 3,400 beds throughout Asia, including Singapore, Malaysia, Brunei, India and China. Interestingly, Parkway also has a joint venture with Fortis rival Apollo Hospitals for Kolkata's Apollo Gleneagles Hospital. Parkway is also developing a greenfield hospital in Mumbai in a joint venture with Koncentric Investments Ltd. In Singapore, it owns Parkway Group Healthcare Pte Ltd and Parkway Hospitals Singapore Pte Ltd, which operates three of Singapore's top healthcare providers: Gleneagles, Mount Elizabeth and Parkway East Hospitals. For the year ended December’09, Parkway Holdings had revenues of $700 million with net profit of $89 million. Fortis scrip rose 4.8% to close at 178.35 at BSE on Thursday giving it a market capitalisation of Rs 5,659 crore ($1.2 billion). Parkway scrip rose 2.6% to S$3.12 at Singapore exchange which gave it a market value of $2.5 billion. At this price, TPG’s stake is valued at $602 million (around 16 times EBIDTAR) as against $685 million that Fortis is paying. It could not be immediately ascertained if Fortis will like to buy more stake. For Fortis Healthcare, this is the second large deal in less than a year and its biggest yet. Last August, it acquired 10 hospitals from financially troubled Wockhardt group for around $187 million in India. Recently Fortis had announced plans to raise Rs 1,250 crore ($275 million) to acquire hospitals. It got board approved to raise the money through preference shares, overseas shares or foreign currency bonds. "It's better to keep the warchest ready for any opportunity rather than start scouting for money when we need it. We know what we want and we know what's available. We want something that is complementary for us," Shivinder Mohan Singh was quoted in news reports last month. Fortis that currently operates 38 hospitals, had indicated it was eyeing revenue of $1 billion by 2015, from about $350 million currently. Fortis had raised Rs 1,000 crore through a rights issue last September. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
