A Business Deal: KKR-Radiant Buys 49.7% Stake In Max HealthCare For A Whopping $293 Million



KKR-Radiant and Max health merger

Mumbai-based Radiant backed by Kohlberg Kravis Roberts & Co LP (KKR), a global private equity major buys an entire 49.7% stake in India’s Max Healthcare for 29.3 crores.

Max Healthcare is part of the south Africa-based Life Healthcare Group Holdings. It is India’s third largest hospital chain and is a part of the $3 billion Max Group with other healthcare based holding companies like Max Bupa Health Insurance and Antara Senior Living.

Max India said in a regulatory filing, "The consummation of the proposed transaction is subject to fulfillment of various conditions set out in the intimation given by Life Healthcare to the Johannesburg Stock Exchange."

The deal is expected to be officially announced next week and Max India will be the first to split so as to create a pureplay listed holding company. Following this, Max Healthcare will merge with Radiant Life Care and then this combined entity will be merged into the holding company.

“The deal is being structured in such a way that the combined healthcare business will be listed on the Indian bourses with KKR as the dominant investor with about 50% stake,” said one of the persons who are familiar with the business development. “Analjit Singh, the founding promoters of the Max Group, will have about 15-16% stake and Abhay Soi, who owns a 51% stake in Radiant Life Care, will have a 14-15% stake in the ultimate listed company.” 

There have been healthcare mergers and acquisitions in the past too and it is increasing at a rapid rate with every passing year. With a lot of financial pressure on providers by value-based reimbursements, the healthcare organizations are striving hard to be efficient in providing quality healthcare, cost management and sustain in the business. In such circumstances, hospital merger and acquisition (M&A) activity is becoming a popular strategy to survive.

In 2017, healthcare organizations had announced 115 M&A transaction which was one of the highest since 2000.  

As per a data published by Bloomberg, the healthcare stakeholders have reported a $156 billion in deals in the first quarter of 2018. According to this news source, there hasn’t been a busier start for healthcare mergers and acquisitions for over a decade.

Some popular recent hospital mergers and acquisitions that have taken place are:

  • Philadelphia-based Einstein Healthcare Network and Jefferson Health
  • LHC Group, Inc. and Almost Family, Inc.
  • Johnson & Johnson bought Actelion, while sold Codman Neurosurgery to Integra LifeSciences
  • In addition to these foreign hospital mergers, one of the biggest M&A deals in the Indian market valued at US$4 billion was when Sun Pharmaceuticals announced its merger with Ranbaxy Laboratories back in 2014.

With more such mergers and acquisitions in the future, we hope to see a new improved phase of healthcare in India.

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