Fortis Healthcare Limited plans to acquire 23.9% stake in Singapore-based Parkway Holdings Limited from TPG Capital in an off market deal for an undisclosed sum.

However, the deal size is rumored to be around $685mn.

Royal Bank of Scotland Plc and Goldman Sachs Group Inc. advised TPG.

Fortis intends to seek four seats on the board of directors of Parkway and also to nominate Malvinder Mohan Singh (current Chairman of Fortis Healthcare) as the Chairman of the Board of Directors of Parkway.

Transaction Reference: BS

Parkway Holdings, listed on Singapore stock exchange is a healthcare service provider that owns 16 hospitals in Singapore, Malaysia, Brunei, India and China. In 2008, the group had revenues of $945mn and profit of $40mn.

As of 2008, the group had a debt of $1.3bn. The total net worth of the group is $2.9bn. Its market capitalization is around $2.27bn

Prior to the deal, TPG capital was the largest shareholder in Parkway Holdings.

Last month, Fortis healthcare had announced its plans to $270mn by issuing GDRs, ADRs or FCCBs. No further update is available on that.

In October 2009, the company had raised Rs 997cr through rights issue.

Fortis healthcare has been on an acquisition spree since last year.

In January 2009, Fortis acquired a controlling stake in Mauritian hospital 'Clinique Darne', for $3.5mn in a JV with industrial group CIEL.

In August, the group had acquired 10 hospitals from Wockhardt for Rs 909cr. The deal included 2 greenfield projects under construction located in Bangalore, Mumbai and Kolkata.

Then there was the acquisition of 3 hospitals from Asiri Group of Hospitals in Sri Lanka in December.

The group's cash position was around Rs 57.49cr as on 31 March 2009 and had a debt burden of Rs 479cr. The funds raised from its rights issue was utilised to part finance its Wockhardt hospitals acquisition, redemption of preference shares and repayment of short debt debt. My question is, how did Fortis manage to finance an acquisition of $685mn?

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KVEZAR VIEW

  DEAL TRACKER FOR

Date	Transaction	Type	Buyer	Size ($mn)
26/07/10	Parkway Holdings - Fortis (Stake Sale)	M&A	Khazanah Nasional Berhad	789.00
15/06/10	Parkway Holdings - FrontPoint Management	Capital Market	FrontPoint Management LLC	-
11/03/10	Parkway Holdings-Fortis Healthcare	M&A	Fortis Healthcare Limited	685.00

 

  Recent Transactions In The Sector

Date	Type	Buyer	Target	Size ($mn)	State
18/06/13	Private Equity	Asian Healthcare Fund	Wellspring Healthcare Private Limited	-	Planned
18/06/13	Private Equity	Tata Capital Healthcare Fund	Curatio Healthcare Private Limited	51.97	Planned
17/06/13	Capital Market	Geetanjali Trading & Investments Pvt Ltd	Transgene Biotek Limited	0.11	Completed
11/06/13	Private Equity	DEG - Deutsche Investitions und Entwicklungsgesellschaft mbH	Ivy Hospitals	12.00	Completed

 

  Profiles

Fund
Name	Corpus	Target Sector	Website	KeyContact
Texas Pacific Group Capital	50000	Consumer Goods Retail Telecom Media IT/ITES/Technology	http://www.texaspacificgroup.com/	David BondermanJames CoulterGunender Kapur

Company
Name	Promoters	Office	Competitor	Website
Fortis Healthcare Limited	Malvinder Singh Shivinder Singh	Escorts Heart Institute And Research Centre, Okhla Road.	KMC Speciality Hospitals (India) Limited (Formerly Seahorse Hospitals) Pushpagiri Health Care Hospitals Private Limited Apollo Hospitals Enterprise Limited	http://www.fortishealthcare.com

  Advisor

Goldman Sachs (Investment banking)

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