Fortis To Acquire 23.9% Stake in Singapore's Parkway Holdings
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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