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TPG may buy 30% stake in Manipal for Rs 500 cr

Private equity (PE) giant Texas Pacific Group (TPG)-controlled Parkway Hospital in Singapore is leading the race to acquire 25-30% stake in Bangalore-headquartered Manipal Hospital for over Rs 500 crore, sources said. The indirect stake buy in one of India’s largest private hospital chains will also be TPG’s biggest play in the domestic market.

Parkway, a luxury hospital chain with footprint across five nations in South East Asia, appears close to clinching the transaction pipping another strategic suitor and Thailand healthcare major Bumrungrad. Manipal hit the market for fund raising almost five months back, and received aggressive offers from a clutch of private equity players like Apax Partners, Actis and Sequoia.

Following the Parkway acquisition four year back, TPG has been aggressively pushing the Singapore healthcare company, with medical tourism play, into new markets including China. The impending transaction may value Manipal Hospital at around Rs 2,000 crore, with India poised to play a big role in Parkway’s overseas strategy, sources added.
TPG Capital has so far invested about $200 million in India, mainly across technology and consumer verticals. Its arm, TPG-Axon, which takes block positions in public companies and invests in real estate, has nearly $1 billion
exposure in India.

It is believed that Actis and Apax were in the running before Manipal promoters veered towards a strategic investor with Parkway backed by TPG running ahead of others. Manipal Hospital operates a network of 17 hospitals in India and Nepal with around 2,500 beds. Sources said the deal will not cover the Manipal Group’s flagship Kasturba Medical College (KMC) at Manipal and a satellite hospital in Mangalore that are managed by a trust.

Inclusive of this two, the group is arguably India’s largest private hospital network. When contacted, Manipal Hospital MD & CEO R Basil declined to comment. PEs have been bullish on the domestic healthcare sector with global funds like Apax and Actis scouting around for investments as well as buyouts. ICICI Ventures, on its part, has raised a dedicated hospital fund with the objective of creating a national network of beds through partnerships and acquisitions.

Source: Economic Times

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