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29 November 2023

Dubai's Abraaj Group to buy majority stake in India's Care Hospitals

By Reuters

Dubai-based private equity firm The Abraaj Group, will buy a majority stake in India's CARE Hospitals from Advent International, betting on growing demand for healthcare services in Asia's third-largest economy.

Financial details of the deal were not provided. However, a source familiar with the matter said the deal was for Advent's 72 percent stake plus some additional shares held by CARE founders, valuing the company at little over $269 million.

Advent, which invested in the hospital chain in 2012, made about a 2.5 times return on its investment, said the source, who declined to be named, as details of the transaction were not made public.

The deal comes as private hospital chains benefit from growing numbers of more affluent Indians willing to pay for better-equipped clinics, given the poor state of public hospitals.

In August 2015, Malaysia's IHH Healthcare Bhd, the world's second-biggest healthcare firm by market value, said it was buying a controlling stake in Global Hospitals, which operates five hospitals with a total of 1,100 beds in India.

IHH also owns 10.85 per cent of India's leading hospital chain Apollo Hospitals Enterprise Ltd.

CARE, which operates a chain of 16 hospitals across nine cities, plans to expand in other parts of India, as well as enter markets where Abraaj operates, the Dubai-based firm said.

"We would like to work closely with the CARE management team and doctors to acquire further businesses that are complementary to CARE," Khawar Mann, managing director and head of healthcare at Abraaj told Reuters.

Mann said the firm will look at a stock market listing for CARE over the next few years but was not in a hurry to do so.