Blackstone Acquires Majority Stake In CARE Hospitals, KIMS Health

Private equity giant Blackstone has taken control of a majority stake in CARE Hospitals, previously owned by Evercare, a division of TPG RISE funds. Additionally, CARE Hospitals has formalized an agreement to acquire a majority stake in KIMS Health. The strategic move is set to establish one of India's largest hospital networks, including 23 facilities spread across 11 cities in the country.

Ganesh Mani, Managing Director at Blackstone Private Equity, said, “We are pleased to make Blackstone’s first investment in India’s healthcare services sector and partner with TPG to create one of the largest healthcare platforms in India. CARE Hospitals and KIMS Health are trusted brands in the Indian healthcare space with a reputation of prioritizing patients and have a track record of excellence in medical ethics and clinical outcomes. We aim to build a patient centric hospital platform focused on high clinical care quality and top-notch service.”

The combined platform will have over 4,000 beds, significantly expanding the healthcare infrastructure. TPG, with its ownership through the Evercare Health Fund, will maintain a substantial minority interest in this integrated platform. Dr. MI Sahadulla, the founder and promoter of KIMS, will retain a 15-20 per cent stake and maintain the responsibility for the hospital's operations.

“We are committed to being a long-term investor and business builder. We seek to grow the platform organically and through acquisitions. Life sciences is a key investment theme for Blackstone and we plan to bring in our global scale and operating expertise. We plan to invest in world-class physical and medical infrastructure, enhance the companies’ digital and technological capabilities, add higher end quaternary care specialties, and cultivate a clinician and employee culture focused organization,” Mani said.

Blackstone-owned Quality Care India Limited (QCIL) is a multi-speciality healthcare provider specializing in various medical fields, managing a chain of multi-speciality hospitals known as 'CARE Hospitals' in numerous cities throughout the nation.

Back in August, there were widespread speculations regarding Blackstone leading the way to acquire KIMS Health Management, marking the valuation at INR 4,000 crore. Manipal Health Enterprises was the other competitor in the race. QCIL has acquired the 55 per cent stake previously owned by the current investor True North, in addition to the 20 per cent stake held by minority shareholders. 

KIMS Health currently operates four hospitals in Kerala, situated in Trivandrum, Kottayam, Kollam, and Perinthalmanna, providing a combined capacity of 1,378 beds. Additionally, a 300-bed hospital located in Nagercoil is anticipated to begin operations by March 2024. KIMS is expected to achieve Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of INR 300 crore and generate a revenue of INR 1,000 crore for the fiscal year 2024.

In May, Blackstone successfully acquired approximately 73 per cent of Quality Care India Limited (QCIL) from Evercare, a TPG Growth-backed entity with a transaction value of USD 800 million (INR 6,600 crore). TPG Growth retained a 25 per cent ownership stake in QCIL. Notably, Blackstone faced competition in the bid for CARE from prominent entities such as Temasek Holdings, CVC Capital, and Max Healthcare.

The acquisition marked Blackstone's entrance into the Indian healthcare sector, enabling the US-based fund to establish a presence in the South Asian healthcare market. CARE operates a network of 15 hospitals across India, in addition to two hospitals located in Bangladesh.