Manipal Hospitals to buy Medanta in Rs. 5,800 crore deal.

The promoters of leading hospital chain Medanta have agreed to sell the business to Manipal Hospitals for Rs. 5,800 crore, said two people aware of the development, ending negotiations that have lasted two years. Besides the promoters, existing investors Carlyle and Singapore-based Temasek also agreed on the price and will exit the hospital chain, they said. 

Medanta’s promoters — renowned cardiac surgeon Naresh Trehan, his family members and cofounder Sunil Sachdeva, who jointly own 55% of the company — will sell their entire stake to Manipal. Medanta, founded in 2009, operates super speciality hospitals and clinics in cities such as Gurgaon, Lucknow, Indore, Ranchi and Sri Ganganagar. 

The Medanta board approved the offer on Friday. Manipal has begun confirmatory due diligence on Medanta assets, said one of the persons cited above. While the documentation work has begun, an agreement is likely to be signed in next 60 days, he added. TPG and Temasek-backed Manipal Hospitals, one of India’s largest hospital chains, had submitted a binding offer of Rs 5,800 crore to acquire Medanta, ET reported on April 29. The management was evaluating the offer and a decision was likely soon, it had reported. 

Medanta’s existing investor Carlyle will decide on the offer in a week and the Medanta board will meet in the next two weeks on the matter, said the ET report. 

US-based PE fund Carlyle holds a 27% stake in Medanta, acquired from US-based Avenue Capital in 2013 at a valuation of $600 million (Rs. 3,540 crore in 2013). Singapore’s investment company Temasek owns 18% of both Medanta and Manipal. 

Though most of the financing will be done by Ranjan Pai through equity and internal accruals, existing investors TPG and Temasek will also participate in this acquisition, said one of the persons.

ET