KKR to Acquire Medicover India's Hospitals in $1.5 Billion Deal
KKR is set to acquire Medicover India's hospitals for $1.5 billion, aiming to boost healthcare growth.
Mumbai: Global investment firm KKR is poised to acquire the Indian operations of Sweden-based Medicover AB for approximately $1.5 billion. This strategic move marks KKR's third hospital acquisition in India within three years, as it seeks to enhance its presence in the burgeoning healthcare market.
The transaction involves KKR purchasing a complete stake from the current shareholders and committing fresh capital to fuel growth and alleviate debt burdens. The total investment ranges between Rs 13,000-14,000 crore, with Rs 3,000-4,000 crore allocated as primary capital to bolster the company's financial foundation.
Medicover's Expansion and Performance
Medicover Hospitals, operating under Sahrudaya HealthCare Pvt Ltd (SHPL), manages 26 hospitals with over 6,000 beds across Telangana, Andhra Pradesh, Maharashtra, and Karnataka. The chain has expanded by acquiring distressed assets and was considering a local initial public offering before the decision to sell. India's market has been pivotal for Medicover, contributing significantly to its global revenue growth, driven by rapid hospital expansion and robust patient footfall.
The Indian arm of Medicover, which includes specialized hospitals for women, children, and cancer care, is supported by over 1,250 doctors. Despite a 13% revenue increase to $217.25 million in FY25, the company reported a net loss of $23.69 million, primarily due to increased debt from recent expansions.
KKR’s Strategic Healthcare Investments
KKR's acquisition of Medicover India aligns with its strategy to capitalize on rising healthcare demand and insurance penetration in India. After previously exiting Max Healthcare with substantial returns, KKR has been actively pursuing new hospital investments, particularly in the southern region. It has already established a healthcare platform with Baby Memorial Hospital and invested in Healthcare Global Enterprises, a major player in oncology care.
Industry insiders project a significant increase in SHPL's EBITDA, expecting it to rise to Rs 600 crore by FY28 as new capacities begin generating revenue. The company's future prospects look promising, despite current financial challenges.
The deal, advised by Kotak Mahindra and Rothschild, is anticipated to be formally announced soon, although neither KKR nor Medicover have commented publicly on the transaction.