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Firms are opting for acquisitions over new projects as operational hospitals mean immediate revenue at lower costs. For an industry that is moving faster than fire in a vineyard, having to wait for more than five years just to get a green field project going can be rather frustrating. But increasingly now, in the healthcare industry, numerous hospital chains — in attempts to clamp down on their waiting periods, boost cash flow and expand into other parts of the country — are on the prowl for strategic acquisitions of other hospitals. Fortis Healthcare’s 46 per cent acquisition of Chennai’s famous Malar Hospitals last week was the second such acquisition for the north Indian hospital chain and also marked its first step into the south. Previously, in 2005, Fortis had acquired 90 per cent in the Escorts Heart Institute in Delhi along with three other Escort hospitals in Amritsar, Faridabad, and Chhattisgarh and a vacant plot marked for an Escorts hospital at Jaipur for more than Rs 600 crore. Towards the end of 2005, Apollo Hospitals acquired 51 per cent stake in Bangalore’s Imperial Cancer Centre and Multi-Specialty Hospital for Rs 35 crore, having already acquired Gleneagles Hospital in Kolkata, Sagar Hospital in Mysore and hospitals in Kakinada, Chennai and Madurai. Today, roughly 5-6 per cent of Fortis Healthcare’s entire revenue comes from Escorts alone. The acquisition that put the company on a financial backfoot that will only break next year, in retrospect, worked brilliantly for Fortis. […]
Chennai-Based healthcare IT services company Helios & Matheson is targeting a $50-100 million all-cash buyout in Europe. It is in talks with two companies, one in Brussels (Belgium) and the other in Paris. The company hopes to close the deal by end of this fiscal. “We are looking at a foothold in Europe. The company has a cash reserve of Rs 85 crore. Another Rs 60-70 crore can be raised through internal accruals. We plan to complete the transactions in three phases (in two years time) but all through cash. We can also borrow from banks, if there is a need, “ said Helios & Matheson MD GK Muralikrishna told ET. Helios and Matheson has so far acquired three companies in the US — The Laxmi Group in California (2001), Maruthi Consulting Inc (2004) and The A Consulting Team (now renamed Helios & Matheson, US in 2006). […]
Nabard, the apex rural development bank in India; Cordaid, a Dutch non-governmental development organization; CEP Investment Trust Fund, a Canadian social venture fund supported by CARE Canada; ENAM Capital, part of ENAM group, a leading Indian financial services conglomerate; Lesing Nominees and Aavishkaar International announced their joint investment in the India-focussed pioneering micro equity fund, Aavishkaar India Micro Venture Capital Fund. This joint investment raises Aavishkaar’s fund corpus to $6 million and will support the launch of up to 60 socio-commercial businesses in India over the next 5 years. The fund aims to double its corpus size in next six months by attracting more global investors. Aavishkaar India Micro Venture Capital Fund commenced operations in 2002 and is aimed at promoting economic growth in rural India by supporting innovation driven bottom-up companies in sectors such as agriculture, rural businesses, handicrafts, renewable energy, healthcare and technology for development. […]
Bennett, Coleman and Co. Ltd (BCCL), the publisher of The Times of India and The Economic Times, has acquired 6.83% equity stake in Kolkata-based lifestyle retail firm Nik-Nish Retail Ltd. “The association with BCCL will help us achieve a higher brand visibility through access to the large audiences provided by the group’s media,” says Bharat Jain, managing director of Nik-Nish Retail. Nik-Nish has been in operation since the past four years and is into retailing of lifestyle products, fashion accessories, gift items and household products. The group’s marketing strategy is to emerge as a leader in fashion accessories and home decorations. […]
Private equity fund Actis Advisors is planning to launch a $3-4 billion private equity fund globally, with $1 billion allocation for India. Actis which has been investing in PE in India for more than a decade is also planning its first India dedicated real estate fund with a corpus of $250-300 million. Sources said the fund raising process for the private equity and real estate funds has already begun. The firm is planning to raise funds from institutional investors in the US, Europe and West Asia. Both the funds are likely to be registered in Mauritius. For the real estate fund, the first close of $100 million has already been achieved. “We are evaluating few deals in the real estate space,” the sources said. J M Trivedi, the managing director of Actis Advisors, could not be reached for comments. The average deal size of investments is likely to be $30-50 million and the private equity fund will be investing across all sectors. […]
Investment company Promethean India PLC said it has acquired a 5.28 pct stake in India-based Nitco Tiles Ltd through its Mauritian subsidiary, Promethean India Investments Fund 1. Nitco Tiles makes building products and distributes ceramic tiles and imported marble. The company also has a newly formed real estate development business through its wholly owned subsidiary, Promethean India said. No financial details were disclosed. (Hemscott) […]
A clutch of leading private equity giants such as Blackstone are in the race to acquire a minority stake in Nusli Wadia’s Bombay Dyeing. There is growing buzz in the market that the Wadias are looking at shedding less than a 15% stake to private equity funds. People close to the situation said that Bombay Dyeing, which needs money to expand its real estate and airlines business, along with its planned forays into retail, may consider the private equity route as one option for raising money. A Bombay Dyeing spokesperson categorically denied any plans to rope private equity investors into the company. When quizzed if private equity giant Blackstone is the frontrunner, a senior executive of the company said: “We have not even had a cup of coffee with anyone in Blackstone at any level.” Akhil Gupta, chairman and managing director of Blackstone India, said: “We have signed confidentiality agreements with several people. I cannot comment on the individual specifics of the deal.” People close to Bombay Dyeing say that the Wadia family, which has never shared equity with outside investors in any of its old core companies, will have the final say in determining the transaction’s success. The deal may not happen if the terms are too onerous or if the Wadia family feels that money can be easily obtained through other means such as a rights issue. […]
Private equity firms are making a killing in India. Most of their investments in listed companies over the past two years have turned out to be money spinners. Some of the PE favourites like NIIT, Lakshmi Overseas, Centurion Bank of Punjab, Diamond Cables, KS Oils, Sical Logistics and Himadri Chemicals & Industries have outpaced the Sensex in returns to investors during the period, although a few like GMR Industries, Spentex Industries and SpiceJet are yet to see positive returns on investments. According to data compiled by research outfit Thomson Financial, the highest rise in share prices following the announcement of PE funding has been for Delhi-based infotech training firm NIIT, mustard oil manufacturer KS Oils and cables & conductors maker Diamond Cables. The share price of NIIT has shot up 518% since May 12, 2005, the day it was announced that Intel Capital would invest $10 million in the firm. In comparison, the Sensex during the same period has risen by 140%. Baroda-based Diamond Cables’ scrip has gone up 396% from June, 2006, when PE funding in the company was announced. Sensex in the same period went up by 56%. KS Oils has seen a 230% increase in the scrip price, against a mere 15% jump for the Sensex from November 15, 2006, the day Citigroup Venture Capital’s investment in the firm was announced. Auto component maker Amtek Auto, pharma company Jubilant Organosys, Patel Engineering and JBF Industries are the four companies where returns on the investments made by PE funds are positive, though a little less than the gains made by the Sensex during the same period. […]
ABG Shipyard is likely to pick up a 40 per cent stake in Western India Shipyard for Rs 225 crore. According to sources, the board of directors of ABG Shipyard in its Wednesday's meeting approved the merger proposal. ABG bought the shares held by institutional investors ICICI, IDBI, Bank of India, State Bank of India and UTI. The original promoters of Western India Shipyard, Western Paques India, Western India Industries and Gadgil Western Corp now hold over 8 per cent stake in the company while retail investors hold the remaining. The institutional investor's holding of over 15 per cent in the company was subsequently increased to 40 per cent after a capital restructuring procedure. “The acquisition is more or less a distress asset sale. The consortium of banks, which are hold majority stakes in the company wanted to exit, as the company was continuously making losses,” a Mumbai-based analyst, who did not wish to be identified, said. […]
Sun Pharmaceutical Industries, which has been struggling over the last few months to gain control over Israel’s Taro Pharmaceutical Industries, may need to pay a higher price than expected to woo the Israeli drug maker’s shareholders, analysts said. Sun had agreed last May to buy Taro Pharma for about $454 million, or $7.75 per ordinary share. However, the deal had hit a roadblock as a section of Taro’s shareholders insisted that the price offered by Sun was too low. In July, Sun released Taro from its non-solicitation agreement, allowing the Israeli company and its investors to weigh other offers. “While it is unlikely that Sun will lose Taro to another buyer, it could end up paying more than it had initially planned,” said a senior industry analyst. Sun bought 18% in Taro in May and has increased its stake to 25% through conversion of warrants. Out of the 6.8 million warrants it had, the Indian company has converted three million, at a price of $6 per share. It also has the option to infuse capital into Taro by converting the remaining warrants. If the merger agreement is defeated at Taro’s general annual meeting, Sun Pharma may need to launch a new tender offer to the shareholders of the Israeli drug maker. While Taro’s promoters have a contractual obligation to sell their stake to Sun, it remains to be seen whether such an offer would be attractive to shareholders at a price of $7.75 per ordinary share. Taro Pharma shares, traded in the Pink Sheets electronic quotation system, were hovering about $7.80 on Wednesday. […]
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