Fortis Healthcare Limited (“Company”) today announced signing of definitive agreements for sale of its hospital business operations at Vadapalani, Chennai to Sri Kauvery Medical Care (India) Limited (“SKMC / Kauvery Group of Hospitals”), for a sale consideration of INR 152 Crore.
The transaction will be an all-cash deal and is estimated to be consummated by end of July 2023, subject to certain conditions as stipulated in the definitive agreements.
The facility, which is on a leased premises, was commissioned in October 2020 and is located on the arterial Arcot Road. It currently has 110 operational beds with a potential to scale up-to approx. 200 beds.
The aforesaid divestment is a part of the Fortis’ ongoing portfolio rationalization strategy in order to focus on deepening its presence in select geographic clusters where it has a sizeable presence.
The acquisition of Vadapalani facility is in line with Kauvery’s strategy to further expand its presence in Chennai, in addition to its existing facilities of 500+ beds at Alwarpet & Radial Road.
Dr. Ashustosh Raghuvanshi, Managing Director & CEO, Fortis Healthcare Limited, commented: “The divestment of Arcot Road hospital business operations is in line with our stated intent of optimizing our hospital assets keeping in mind our key markets and regions. This also underpins our focus on improving our overall profitability and margins in the segment, allowing us to re-allocate capital in our key clusters.”
Dr. S Chandrakumar, Founder & Executive Chairman of Kauvery Group of Hospitals commented: “We are focused on our growth plan to become a leading and trusted health care provider in South India. With this acquisition, we will have 750+ beds in Chennai. “
Dr. S Manivannan, Founder & Managing Director of Kauvery Group of Hospitals said, “Kauvery continues to provide best-in-class personalized care, with the highest standards of clinical excellence and ethical practices. This acquisition helps us to expand our care to more regions in Chennai.”
For Fortis, Saraf and Partners, Law Offices acted as legal advisors and Veda Corporate Advisors acted as financial advisors for this transaction.
For Kauvery, Khaitan & Co and Shardul Amarchand Mangaldas & Co acted as legal advisors for this transaction.
About Fortis Healthcare Limited
Fortis Healthcare Limited is a leading integrated healthcare delivery service provider in India. The healthcare verticals of the company primarily comprise hospitals, diagnostics and day care specialty facilities. Currently, the company operates 27 healthcare facilities (including O&M facilities). The Company’s network comprises approximately 4,500 operational beds and 400 diagnostics centres.
About Kauvery Group of Hospitals
Kauvery Group of Hospitals, is a leading hospital chain in South India having built a strong foothold in its focus markets of Tamil Nadu and Karnataka over the last two decades. With this acquisition, the Group will operate a network of 11 hospitals comprising of 2,000+ beds spread across 6 cities viz. Chennai, Trichy, Bangalore, Salem, Hosur and Tirunelveli.
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