NEW DELHI: Leading healthcare firm Max India on Monday announced selling of majority of its stakes in Max Healthcare Institute to Radiant Life Care, which is backed by global investment firm KKR.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, which will result in KKR and Radiant promoter Abhay Soi together acquiring a majority stake in Max Healthcare.
The resultant shareholding of the combined entity will be 51.9 per cent, 23.2 per cent and 7 per cent (post sale of 4.99 per cent as mentioned below) held by KKR, Abhay Soi and Max promoters respectively, with the balance being held by public and other shareholders. Upon closing, Soi will be the chairman of the combined entity, which will have an equity valuation of Rs 7,242 crore and over 3,200 beds throughout 16 hospitals across India.
Under the proposed deal, 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 publicly. 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 the 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 a merged Max Healthcare or the combined entity. As a result of the reverse merger, shareholders of Max India will receive 99 shares of the combined entity of Rs 10 each for every 100 share of Rs 2 each 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 Sensex and Nifty. The Max-Radiant deal was announced at a time when another major deal in India’s healthcare sector is underway. Earlier this year, Malaysia’s IHH Healthcare Berhad won the closely fought bidding war, in which Radiant-KKR combine had also put in a bid, to take over the cash-strapped Fortis Healthcare Ltd, though the open offer has now been held up due to a court ruling.
Going forward, more mergers and acquisitions are expected to take place in the country’s healthcare sector as deep-pocketed players such as KKR-Radiant, Ranjan Pai-led Manipal Group and IHH have been aggressive in expanding their reach in the country.