General Atlantic joins race for Fortis

Private equity fund General Atlantic Llc has become the fifth entity to show interest in buying a controlling stake in hospital operator Fortis Healthcare Ltd, according to two people aware of the development.

Three US funds — KKR and Co Lp, TPG Capital and Bain Capital — and strategic buyer IHH Healthcare Bhd are already in talks to buy the stake from brothers Shivinder Mohan Singh and Malvinder Mohan Singh. IHH Healthcare, Asia’s largest healthcare group, operates the Parkway Pantai hospitals.

A deal could value Fortis, India’s second-largest hospital operator, at around $1.6 billion (₹10,600 crore) or ₹200-210 a share, said one of the two people cited above, both of whom spoke on condition of anonymity. The Singh brothers are in the process of selling businesses to reduce the group’s debt, which stood at ₹4,700 crore as of March 31 2016, up from ₹3,831 crore in June 2015.

Fortis operates 45 hospitals (including projects under development) in India, the UAE, Mauritius and Sri Lanka. The Singh brothers control Fortis Healthcare Holdings Pvt. Ltd (FHHPL), which owns a 52.2% stake in Fortis Healthcare as of end-march.

KKR is in talks with the Singh brothers to acquire a controlling stake in Fortis, Mint reported in January. Mint had also reported that Bain Capital was interested in acquiring the Fortis stake.

Spokespersons for Fortis Healthcare and General Atlantic declined to comment.

General Atlantic, which has invested about $2 billion in India since 2002, including companies such as Billdesk and IIFL Wealth Management Ltd, is interested in healthcare as well. It is also in discussions with private equity investors to acquire their 69% stake in Medplus Health Services Pvt. Ltd, the second-largest pharmacy retail chain in India.

“IHH is always looking at vari ous value-accretive opportuni ties. However, it is not appropri ate for us to comment on specific transactions and we will update the market if there are any mate rial developments,” said the IHH spokesperson.

“Healthcare had been a key sector for private equity funds over the last three to four years. A number of hospital chains have seen multiple rounds of funding already — as these assets mature there would be interest from cor porate buyers as well as consoli dation opportunities for the investors,” said Sanjeev Krishan transaction services and private equity leader at PWC India.