Blackstone acquires Care Hospitals, Kims Health in $1 billion twin deal
The New York-based firm secured roughly a 75% stake in Care Hospitals from Evercare Health Fund, an arm of TPG, for around $700 million. The combined entity of Care and Kims Health will span 23 facilities across 11 cities, boasting over 4,000 beds. The cumulative enterprise valuation of both transactions is roughly $1.33 billion.
The New York-based firm secured roughly a 75% stake in Care Hospitals from Evercare Health Fund, an arm of TPG, for around $700 million, said a persom familiar with the transaction, requesting anonymity. TPG Rise retains the remaining stake. Care Hospitals, in turn, has entered an agreement to invest around $400 million to acquire 80% stake True North-backed Kims Health, the person cited above said. Of this, Blackstone has invested $300 million, while TPG has put in around $100 million. Kims Health's founder M. I. Sahadulla will retain the residual stake. The combined entity of Care and Kims Health will span 23 facilities across 11 cities, boasting over 4,000 beds Blackstone’s overall investment will be $1 billion. The cumulative enterprise valuation of both transactions is roughly $1.33 billion. “We are pleased to make Blackstone’s first investment in India’s healthcare services sector and partner with TPG to create one of the largest healthcare platforms in India," Ganesh Mani, managing director at Blackstone Private Equity said. “We are committed to being a long-term investor and business builder. We seek to grow the platform organically and through acquisitions. Life sciences is a key investment theme for Blackstone and we plan to bring in our global scale and operating expertise. We plan to invest in world-class physical and medical infrastructure, enhance the companies’ digital and technological capabilities, add higher end quaternary care specialties, and cultivate a clinician and employee culture focused organization," Mani added. In May, Blackstone had signed a definitive agreement for Care Hospitals, but the transaction faced delays due to a legal challenge posed by Max Health Enterprises. The transaction was finalized on Monday. While Kims Health originally engaged with Manipal Health Enterprises for a potential deal, the final agreement was inked with Care Hospitals. Sahadulla will persist in leading Kims Health. “We believe there is significant potential in creating a market leading platform through both organic and partnership-driven consolidation efforts, which is evidenced in our proposed association with Kims Health," said Ankur Thadani, partner at TPG Rise. Following the transaction, True North, which previously held a 61% stake in Kims, will divest its entire position. Together, the integrated platform will offer close to 30 clinical specialties, encompassing areas such as cardiac sciences, oncology, and organ transplants. On the advisory front, TPG was counseled by Barclays and Rothschild for the Care Hospitals deal. ICICI Securities provided guidance to Kims Health and its stakeholders. Blackstone sought advice from o3 Capital for the Care Hospitals transaction. Legal guidance was offered by Shardul Amarchand Mangaldas for TPG and Kims Health, Desai Dewanji for True North, and Trilegal for Blackstone.
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