Backed by global investment firm KKR, Radiant Life Care Private Limited, a leading Indian hospital management company, has entered into a transaction under which its shareholders will acquire a majority stake in Analjit Sigh's Max Healthcare Institute Limited from Max India Limited.
The Radiant-Max Healthcare combine will create the largest hospital network in North India, and the top three hospital networks in India by revenue and fourth largest in terms of operating beds.The merged entity will continue to use the current brand name Max Healthcare, with appropriate adjustments to its logo.
The merged entity will operate over 3,200 beds throughout 16 hospitals across India, including tertiary and quaternary care facilities offering high end critical and super speciality care supported by strong local brands such as BLK Hospital, Max Saket Hospital, Max Smart Hospital, Max Patparganj Hospital, and Nanavati Hospital.
The combined business is expected to provide significant growth potential and compelling business synergies. By providing best-in-class patient care, the combined business plans to address India’s growing demand for quality medical treatment.
According to a press release issued on on Monday by Radiant Life Care, promoted by Abhay Soi, the acquisition will be undertaken through a series of transactions, including Radiant’s purchase of a 49.7 per cent stake in Max Healthcare from South Africa-based hospital operator Life Healthcare in an all cash deal, followed by demerger of Radiant’s healthcare assets into Max Healthcare.
Abhay Soi, Chairman and Managing Director of Radiant, who will will lead the combined company as its Chairman, said in the release, “Radiant has achieved significant growth and expansion during a time of rapid industry consolidation, and the proposed acquisition of a majority stake in Max Healthcare marks an exciting step forward in our strategy to increase scale by merging with a leading and complementary hospital network. We are fortunate to have strong support from KKR as we continue our mission of providing superior medical services in India.”
Analjit Singh, Founder & Chairman Emeritus of Max Group, said, “Max Healthcare has been an integral part of my entrepreneurial journey and I can’t think of better partners than Radiant, backed by KKR, to carry forward this legacy. Over the years, the business has come to be known for its consistently high level of service and clinical excellence across 14 world class facilities, and to this day, it continues to set new benchmarks in clinical quality. The merger offers significant growth potential with revenue and cost efficiencies to be extracted. Both Max and Radiant possess complementary sets of capabilities in running healthcare establishments and KKR brings with it extensive global experience and expertise in healthcare investments as well as capabilities in prudent financial management and efficient capital allocation.”
Sanjay Nayar, Member & CEO of KKR India, said, “We are excited to back Radiant’s efforts towards consolidation in the healthcare sector by helping them create an effective platform in India for the highest-quality healthcare service providers, best in class infrastructure, practices, doctors and management teams. The country’s private hospital market has grown rapidly in recent years, and we expect demand for quality healthcare to outpace overall economic growth as Indians demand better quality care. The combined business will enjoy a leadership position amongst the attractive metros of Delhi and Mumbai.”
Prior to the merger transaction involving Radiant and Max Healthcare, Max India will demerge its non– healthcare businesses (comprising of Max Bupa and Antara Senior Living) into a new wholly owned subsidiary of Max India whose shares will be listed separately on both BSE Limited and National Stock Exchange of India Limited..This new company will be spun off, and shareholders of Max India will receive one share of Rs 10 each of the new company for every five shares of Rs 2 each that they hold in existing Max India.
Following the demerger and the spin-off, Radiant’s healthcare assets will be demerged into Max Healthcare, which will then undertake a reverse merger with Max India to create Merged Max Healthcare (The “Combined Entity” or “Merged Entity”). As a result of the reverse merger, shareholders of Max India will receive 99 shares of the Merged Entity of Rs 10 each for every 100 share of Rs 2 each that they hold in Max India.Post-merger, Max India will get dissolved without being wound up and subsequently the equity shares of the Merged Entity will get listed on both BSE Limited and National Stock Exchange of India Limited.