Radiant Life Care Private Limited, backed by global investment firm KKR has entered into a transaction whereby its shareholders it will acquire a majority stake in Max Healthcare Institute Limited from Max India Limited.
The acquisition will be undertaken through a series of transactions, including Radiant’s purchase of a 49.7% 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.
Upon closing of the transaction, Abhay Soi will lead the combined company as its Chairman, supported by a strong leadership team.
In the final entity, KKR will have majority stake with 51.9% stake and Abhay Soi will have 23% stake. Analjit Singh, the founding promoter of Max India will be classified as non-promoters in the merge entity and finally settle with 7% stake after selling 4.99% stake to KKR in the merged entity as per the company announcement.
ET reported the news on December 14.
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 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 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 that they hold in Max India.
Post-merger, Max India will get dissolved without being wound up and subsequently the equity shares of the combined entity will get listed on both BSE Limited and National Stock Exchange of India Limited.
The final resultant shareholding of the combined entity will be 51.9%, 23.2% and 7.0% (post sale of 4.99% as mentioned below) held by KKR, Abhay Soi and Max Promoters respectively, with the balance being held by public and other shareholders.
Radiant Life care CMD Abhay Soi said, “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. The merger offers significant growth potential with revenue and cost efficiencies to be extracted.”
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 combined business will enjoy a leadership position amongst the attractive metros of Delhi and Mumbai.”
The combination of Radiant and Max Healthcare will create the largest hospital network in North India, which will become among the top three hospital networks in India by revenue and the fourth largest in India in terms of operating beds. 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.
( Originally published on Dec 24, 2018 )