Manipal-TPG combine buys Fortis, SRL Diagnostics

New Delhi, March 28 

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The value of the entity resulting from the merger of Fortis Healthcare and Manipal Hospital Enterprises will be Rs 15,000 crore, a top Fortis official said on Wednesday. The merger is expected to be completed in 10-12 months, he added.

“When you look at value of Fortis, when you look at value of Manipal and when you look at money being infused that is Rs 3,900 crore, that adds up to Rs 15,000 crore,” Fortis Healthcare CEO Bhavdeep Singh said in a conference call on Wednesday. The value of the resulting entity thus will be 15,000 crore, he added.

The company’s Board had on Tuesday approved the demerger of Fortis hospitals business, which will be acquired by Manipal Hospitals and TPG Capital, along with the sale of 20% stake in diagnostics chain SRL Diagnostics Ltd.

Ranjan Pai and TPG will invest Rs 3,900 crore into Manipal Hospitals. The funds will be utilised for financing the acquisition of 50.9% stake in SRL (20% from FHL and 30.9% from other investors for which discussions are currently underway), Fortis Healthcare had said on Tuesday. 

In addition, the investment will support the proposed acquisition of hospital assets owned by RHT Health Trust and the growth of the hospitals and the diagnostics businesses, it added.

“The merger will take time. The merging of Fortis into Manipal will take between 10 to 12 months,” Singh said.

When asked about the investigations by Serious Fraud Investigation Office (SFIO) in the company over alleged financial irregularities in the company involving its promoters, Singh brothers, Bhavdeep Singh said: “We are cooperating with the ongoing SFIO investigations.” However, the completion of the deal is not contingent upon the conclusion of the ongoing investigations, he added. — PTI

Deal dynamics

• The merger is expected to be completed in 10-12 months
• The company’s Board had on Tuesday approved the demerger of Fortis hospitals business 
• Ranjan Pai and TPG will invest Rs 3,900 crore into Manipal Hospitals
• The funds will be utilised for financing the acquisition of 50.9% stake in SRL (20% from FHL and 30.9% from other investors)

Fortis Healthcare shares plunge over 13%

• Shares of Fortis Healthcare on Wednesday tumbled over 13% after the company’s Board approved demerger of its hospitals business
• The stock tanked 13.37% to settle at Rs 123.40 on the BSE
• At the National Stock Exchange, shares of the company slumped 13.28% to end at Rs 123.35
• The company’s market valuation also fell by Rs 986.77 crore    to Rs 6,400.23 crore