Sheares Healthcare India, backed by Singapore’s Temasek, has reached a deal to acquire a majority stake in Manipal Hospitals, led by billionaire Ranjan Pai, multiple industry officials familiar with the matter told the media. It is the largest ever private equity deal in the healthcare sector in India, they added.

On December 27, 2022, Moneycontrol reported that existing investor Sheares sought a controlling stake in the hospital chain by buying stakes from the promoter family and other investors TPG and NIIF.

“The deal has been signed, and an official announcement is expected next week. As part of the deal, Manipal Hospitals is expected to have an enterprise value of between Rs 40,000 crore and Rs 42,000 crore,” said one of the people cited above.

Once the deal is complete, Temasek’s Shears will acquire 41% of the shares from other parties, taking a combined 59%, another person said.

A third person confirmed the above, adding that a formal deal announcement is expected next week.

Shares, which manages a portfolio of healthcare delivery assets for investment giant Temasek, is an existing shareholder in Manipal Hospitals with a stake of about 18%. Apart from Temasek-led Shears, other external shareholders of Manipal Health Enterprises include US private equity firm TPG, which holds about 21% of the shares, and Indian sovereign wealth fund NIIF (National Infrastructure Investment Fund), which has 8% of the shares.

Apart from Manipal Hospitals, Sheares India is also an investor (majority stake) in Medica Synergie, a Kolkata-based hospital chain. Temasek also owns about 16% of Global Health, the operator of Medanta Hospital, which is listed on the domestic exchange.

R Venkatesh is the CEO of Shears India. Previously, he was MD, India, for over 12 years at Temasek Holdings.

In December 2021, Shares Healthcare, a Temasek platform, acquired a majority stake in multi-speciality hospital Medica Synergie. Since then, it has been gradually exploring other domestic inorganic options.

On September 3, 2022, Media reported that peers Manipal Health Enterprises and Max Healthcare might express interest if a controlling stake in private equity firm True North-backed KIMSHEALTH is up for grabs.

On February 7, 2023, Media also reported that the hospital chain led by Ranjan Pai had made a new, revised bid for Emami Group’s AMRI Hospital and was in settlement talks with the Kolkata-based diversified conglomerate.

In late 2022, Manipal Health Enterprises filed suit in the Delhi High Court seeking to bar Emami Group from selling or transferring its majority stake in AMRI Hospitals to a third party or management change. The move follows more than a year of protracted negotiations between the two sides, which failed to reach an agreement after disagreements over terms and conditions, including valuations.

Manipal Group, with nearly 8,000 beds across 28 hospitals, has been consolidating. In November 2020, it acquired the Indian assets of Columbia Asia Hospitals for about Rs 2,100 crore, followed by the acquisition of Vikram Hospital in Bengaluru from Multiple Private Equity for about Rs 350 crore in June 2021.

TPG Capital, which bought a major minority stake in the Ranjan Pai-led hospital chain in February 2015 for Rs 900 crore, has been seeking a return on its seven-year bet. As part of its India portfolio, TPG also backs Care Hospitals, Motherhood hospitals and infertility chain Nova IVF.

Back in January 2022, Moneycontrol was the first to report that TPG-backed Evercare was seeking to exit Hyderabad-based Care Hospitals nearly three years after taking over hospitals and clinics previously managed by funds of defunct private equity firm Abraaj.