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Goldman Sachs picks up 26% in Nova Specialty Surgery

Short-stay surgery provider Nova Specialty Surgery has raised 300 crore from Goldman Sachs and existing investor New Enterprise Associates, to expand its network of centres and fertility clinics in the country.
The private equity arm of Goldman Sachs Group, which led the round, has invested 220 crore for a 26% stake in the company that makes it the largest shareholder.
Other investors in the company include Omani industrial group OMZEST and GTI Group, a New York-based investment firm.
“It is a very tough global environment to raise funds, especially so in India, ” said Suresh Soni, founder and chairman of Nova.
Bangalore-based Nova which has raised $90 million so far, plans to set up 25 new specialty surgery centres across India and the Middle East in next two years, as demand for ambulatory services rises across the region.
Nova will also use the funding to set-up 25 in-vitro fertilisation (IVF), or assisted reproductive technology, centres. “This investment is consistent with our strategy to partner withexperienced management teams and owners to build high qualitybusinesses of scale in under-served sectors critical to India’s growth,” said Ankur Sahu, co-head of private equity in Asia at Goldman Sachs.
Soni, a serial entrepreneur whose other ventures include US-based technology start-up Coldwatt, biotechnology firm Glori Oil which helps in oil exploration, aviation engineering company Airworks, founded Nova three years ago.
Once Nova establishes 25 surgical centres and 25 IVF centres, it will have a capacity to perform one lakh surgeries a year. Typically ambulatory surgery is used to treat a range of conditions such as knee cap replacement, hernia repair, hysterectomies, orthopaedic complications and kidney stone removal.
These centres cannot be used to treat acute medical illnesses, undertake organ transplant, cardiac and neurosurgery or provide emergency services.
A typical Nova centre costs around 15 crore compared to a hundred-bed hospital which costs between 100-200 crore.
Smaller footprint of Nova centres also reduces real estate costs significantly. This model is helping Nova expand in smaller cities such as Jaipur, Ahmedabad, Kanpur, Chandigarh, Ludhiana and Pune. The company aims to achieve revenue of 1,000 crore in next three years.
“Backing healthcare services platforms that improve quality, increase access and reduce costs is a proven strategy for us,” said Ben Mathias, executive director of New Enterprise Associates, India. Industry expert Harish HV, a partner at Grant Thornton India, said private equity and venture capital investments in the healthcare industry this year are increasing rapidly as demand outstrips supply.
This year, the healthcare and life sciences sector has received maximum investment from PE and venture capital players, attracting $817 million across 29 investments till date, according to data from private equity-focused research firm Venture Intelligence. Last year, there were 38 deals in the sector worth $421 million.
Source: Economic Times

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