Aster, Blackstone-backed Quality Care to merge
The merged entity, Aster DM Quality Care Limited, will have more than 10,150 beds spanning 27 cities, and is expected to become one of the top 3 hospital chains in India.
Hospital chains Aster DM Healthcare Limited, and Blackstone- and TPG-backed Quality Care India Limited, have agreed to merge, creating a network of 38 hospitals across the country.
Aster DM shareholders (including promoters) will hold a 57.3% stake in the merged entity, which will be called Aster DM Quality Care Limited, while Quality Care shareholders will own the remaining stake.
Based on the swap ratio, the resultant shareholding of the merged entity will be 24.0% and 30.7% held by Aster promoters and Blackstone respectively, with the balance 45.3% being held by the public and other shareholders, according to a statement.
Dr Azad Moopen, Founder of Aster, will remain the executive chairman and oversee the merged entity. Varun Khanna, Group Managing Director of Quality Care, will become the MD and group CEO of the merged entity.
“The new combined entity ‘Aster DM Quality Care Ltd’ is poised to become one of the largest healthcare players in the industry, setting new benchmarks in patient-centric care, innovation, and accessibility,” said Moopen.
“The merger will also provide our medical professionals with an opportunity to cater to higher and diverse patient inflows,” he added.
The combined hospital chain will have more than 10,150 beds spanning 27 cities, making it one of the top 3 hospital chains in India, the statement said.
The merged entity is positioned for substantial revenue growth, with opportunities for brownfield and greenfield expansion, and it is expected to add 3,500 new beds between FY24 and FY27.
The merger is expected to add to the earnings per share.
Aster DM Quality Care Ltd is set to have a combined portfolio of four major brands—Aster DM, CARE Hospitals, KIMSHEALTH and Evercare.
The transaction values Aster at 36.6x FY24 adjusted post INDAS EV/ EBITDA, which is 45% higher than the multiple ascribed to QCIL i.e. 25.2x FY24 adjusted post INDAS EV/ EBITDA, the statement said.
Edited by Swetha Kannan
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