INDIA – Promoters of Manipal Health Enterprises Pvt Ltd, the Pai family, are in talks with a clutch of banks led by Barclays PLC to raise US$500 million, as they seek to buy back half the shares held by TPG Capital in India’s second-largest hospital chain, people aware of the matter said.

Deutsche Bank Aktiengesellschaft, DBS Group Holdings Ltd., NOMURA Co., Ltd., and Standard Chartered PLC have also been approached, the people told Economic Times.

The fundraise, which will be a syndicated acquisition financing facility, will be priced after the Ranjan Pai-led group finalizes buyback terms. Manipal Hospitals, TPG and the banks did not comment.

Discussions are ongoing on the value that will probably be at a variety over the worldwide benchmark Secured Overnight Financing Rate, mentioned one of many folks. “It should be mostly a five-year facility,” he mentioned.

Manipal Hospitals, TPG and the banks didn’t remark. TPG, which invested US$146 million in Manipal in 2015, holds a 21.5% stake.

Globally, sponsored funds or normal companions of PE companies take credit score services to finance buyouts, primarily to decrease the price of capital.

Likely valuation at around 2 billion

The proposed transaction is more likely to worth Manipal Hospitals at round ₹18,000 crore (US$2.3 billion), mentioned a second particular person.

If the deal fructifies, it is going to yield a close to three-fold return for the US PE agency on its seven-year-old funding.

The deal is aimed toward offering a partial exit to the Texas-based funding agency, one of the crucial aggressive buyers within the healthcare house in India.

India’s National Investment and Infrastructure Fund and Singaporean sovereign fund Temasek Holdings are the 2 different exterior buyers within the agency. The promoters maintain near a 60% stake.

With US Treasury yields remaining elevated, offshore financial institution loans are more and more gaining floor as they’re cheaper than elevating funds by means of bonds.

Globally, sponsored funds or normal companions of PE companies take credit score services to finance buyouts, primarily to decrease the price of capital.

Merger and acquisition funding in India soared three-fold in FY22 to US$32.5 billion. Acquirers raised a file US$32.2 billion in 2021-22 to fund offers in 321 transactions, exhibits knowledge from analytics agency Dealogic. A year earlier, this was US$10.9 billion.

Footprints & origins

Besides its minority stake in Manipal Hospitals, TPG Growth has a majority stake in Asia Healthcare Holdings, which runs India’s largest mom & little one care hospital chain, Motherhood Hospitals, and infertility chain Nova IVF.

In India, TPG Growth additionally owns Hyderabad-based CARE Hospitals, which has a community of 15 healthcare services with over 2,400 beds.

In November 2020, Manipal Hospitals acquired the Indian property of Columbia Asia Hospitals for round ₹2,100 crore (US$264.7 million) and in June 2021, bought Bengaluru-based Vikram Hospitals from Multiples personal fairness agency for round ₹350 crore (US$44.1 million).

The Pai household, which based India’s first privately owned medical faculty, within the city of Manipal in Karnataka in 1953, arrange Manipal Hospitals in 1991 in Bengaluru. Manipal has round 7,800 beds unfold throughout the nation.

The hospital business would require investments of round US$245 billion over the subsequent 20 years, in line with a latest PwC report.

India needs to add 3.6 million beds, 3 million medical doctors and 6 million nurses over the subsequent 20 years, it mentioned.

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