Blackstone-TPG backed Quality Care India to acquire KIMS for $400 mn

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PE firm Blackstone on Monday said it has completed the acquisition of a 72.5 per cent stake in Quality Care India (QCIL), a hospital platform that operates a network of CARE Hospitals from Evercare, a platform backed by TPG RISE funds. QCIL, jointly backed by Blackstone and TPG, has now signed a definitive agreement to acquire around 80 per cent in KIMSHEALTH, which has been valued at $400 million. Blackstone’s overall commitment, including its investment in QCIL and KIMSHEALTH, is estimated to be around $1 billion, said industry sources close to the development.


TPG, whose shareholding in CARE Hospitals is held in its Evercare Health Fund, will continue to hold the remaining stake (around 27.5 per cent) in QCIL. Dr MI Sahadulla, founder chairman and managing director of KIMSHEALTH, would continue to hold around 20 per cent in the hospital chain and also continue to run the hospital business.


The acquisition of CARE Hospitals by Blackstone, and in turn KIMSHEALTH by CARE Hospitals, would create one of India’s largest hospital platforms spread over 11 cities in India with 23 facilities and 4,000 beds. Aster DM India and Fortis Healthcare roughly operate around 4,000 beds in the country, while Apollo Hospitals Enterprises has over 9,000 operational beds and Manipal Hospitals over 8,000 operational beds.


Ganesh Mani, MD, Blackstone PE said, “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.” Mani added that they want to grow the platform organically and through acquisitions.


Media reports suggest that Blackstone had beaten other contenders, including Max Healthcare and Temasek-backed Manipal Hospitals, to acquire KIMSHEALTH.


KIMSHEALTH posted revenue of Rs 967.6 crore in FY23, growing 16 per cent, and Ebitda of Rs 186.7 crore, up 26 per cent. Profit after tax grew 39 per cent to Rs 141.9 crore. It runs four hospitals in Kerala with around 1,400 beds.


Ankur Thadani, partner at TPG, said they were excited to partner with Blackstone to continue their efforts and journey in building CARE Hospitals Group with networks across India and South Asia.


Sahadulla, who will continue in his role, said that this partnership with global players will strengthen their capabilities and help the business enter its next phase of growth.


“We at KIMSHEALTH thank all our minority investors for their trust over the last 21 years and are proud to have created a successful exit event for them,” he added.


True North will sell its entire stake in KIMSHEALTH India as part of the transaction.


The combined platform will deliver care in more than 30 clinical specialties, including cardiac sciences, oncology, neurosciences, renal sciences, orthopaedics, gastroenterology, and integrated organ transplant.


Barclays and Rothschild acted as financial advisors to TPG on the CARE Hospitals transaction. ICICI Securities advised KIMSHEALTH and its shareholders. O3 Capital advised Blackstone on the CARE Hospitals transaction. Shardul Amarchand Mangaldas acted as legal advisors for TPG and KIMSHEALTH, Desai Dewanji advised True North, and Trilegal advised Blackstone.