Temasek to buy additional 41% stake in Manipal Health Enterprises for Rs 16,300 crore

Singapore's sovereign wealth fund Temasek will buy an additional 41 per cent stake in Manipal Health Enterprises for more than Rs 16,300 crore (USD 2 billion), taking its total shareholding to 59 per cent in one of the country's largest hospital chains.

The acquisition of the stake, announced on Monday, is the largest deal in the Indian healthcare sector.

Headquartered in Bengaluru, Manipal Health Enterprises (MHE) runs a chain of 29 hospitals under the brand name 'Manipal Hospitals' in 16 cities, with close to 8,300 beds.

Temasek will buy the additional stake from Manipal founder Ranjan Pai's family, TPG and the National Investment and Infrastructure Fund (NIIF).

However, financial details were not disclosed in the announcement made on Monday.

Sources said Temasek's buyout of the additional stake will be for more than Rs 16,300 crore valuing MHE at around Rs 40,000 crore, making it the largest deal in the Indian healthcare sector.

The transaction tops the list of multi-crore deals in the country's healthcare sector, including the sale of 27 per cent for Rs 9,100 crore by KKR in Max Healthcare last year, and Malaysia-based IHH Healthcare's purchase of 31.17 per cent stake for Rs 4,000 crore in Fortis in November 2018.

According to a joint statement, the Pai family's stake will reduce to 30 per cent from about 50 per cent in MHE as part of the deal.

Also Read: Singapore's Temasek buys 33% additional stake in Manipal Hospitals from TPG & promoters

Temasek, which already has an 18 per cent stake in Manipal through a wholly-owned subsidiary Sheares Healthcare Group, will increase its overall holding to 59 per cent.

After the transaction, global alternative asset management firm TPG will hold 11 per cent stake through its new Asia fund -- TPG Asia VIII. This is being done after completely exiting its earlier investment in MHE through TPG Asia VI done in 2015.

India's sovereign wealth fund National Investment and Infrastructure Fund (NIIF) will sell its entire stake in MHE to Temasek.

"We are very glad for Temasek's acquisition of a significant stake in Manipal Health Enterprises and its support to the management team in building out the platform to its full potential," Manipal Group Chairman Ranjan Pai said in the statement.

He noted that investing in healthcare requires a long-term outlook as well as a sensitivity to social responsibility.

"I am glad that we have partners like Temasek and TPG who resonate with these values and will continue to be a part of the journey ahead.

"I am also grateful to NIIF who partnered with us at a critical juncture, at the peak of the Covid-19 pandemic and supported us as we continued to provide high-quality healthcare," Pai said.

TPG Capital Asia Co-Managing Partner Puneet Bhatia said that by re-investing through Asia fund -- TPG Asia VIII, the company looks forward to continuing to support Manipal's mission of bridging the quality healthcare infrastructure gap in the country.

Temasek had a net portfolio value of USD 297 billion as of March 31, 2022.

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