Safecorp Holdings to acquire Star Health T E NARASIMHAN

Safecrop Holdings, a consortium of investors including WestBridge AIF, Rakesh Jhunjhunwala and Madison Capital, has signed a definitive agreement with the shareholders of Chennaibased Star Health & Allied Insurance Company to acquire its shares. While the company and investors did not disclose the value, sources said the deal value could be around $1 billion.

V Jagannathan, chairman and managing director, Star Health, declined to comment on the valuation or any numbers, but said the new investors, with their experience and golden touch,will enable the company to scale heights.

Star Health Investments, ICICI Venture, Apis Partners, Tata Capital, Alpha, Oman Insurance and Jagannathan held 89.42 per cent in Star Health as of March 31.

Star Health, founded in 1996, is the first stand-alone insurance company and claims it has a market share of 10.6 per cent in the health insurance sector as of March 31. Kotak Investment Banking, Evercore and Mizuho Securities (Singapore) acted as the financial advisors to Star Health and its shareholders. Nishith Desai Associates and Trilegal acted for the purchasers and Platinum Partners acted for the company.

Company's net profit for the financial year 2017-18 was ~1.7 billion against ~1.18 billion a year ago. Gross direct premium was ~41.61 billion against ~29.6 billion.

“We are really excited about Star Health, a dominant market leader in the retail health insurance industry. We believe the retail health insurance industry will continue to grow at a healthy pace in the coming decade, driven by increasing penetration. This aligns well with WestBridge’s investing philosophy and long-time horizon,” said Sumir Chadha, co-founder and managing director, WestBridge Capital.

After the regulator allowed general insurers to apply for stand-alone health insurance companies, it received several applications, including from Reliance Capital, ICICI Lombard, Premji Investment and others.