Singapore's Thomson Medical has emerged as the surprise highest bidder for a controlling stake in Hyderabad-based CARE Hospitals, as US private equity fund Advent International's efforts to sell the company have reached the final stages.
Emerging markets private equity group Abraaj and a consortium consisting of Singapore's Temasek Holdings and TPG Growth Capital Fund are the two other final contenders to buy Advent's 72 per cent stake in CARE Hospitals, multiple sources close to the transaction told ET.
Though Thomson has submitted the highest financial bid, the seller is believed to prefer the competing offers from the financial investors as the Singapore firm's bid is acomplicated one involving a combination of cash and stock, these sources said.
The bids range between Rs 1,800 crore and Rs 2,020 crore, they said. At this valuation, Advent will be making a near threefold return on constant currency terms on its 2012 investment. The short-listed bidders are in the middle of final negotiations and an announcement is likely within two weeks.
"It's delicately poised. TPG-Temasek and Abraaj's offers are all-cash offers and Advent can cash out in one go, whereas Thomson's bid, which is higher numerically, is linked to performance milestones and offers a staggered exit to Advent. The operating team has left the final decision to the investment committee," said an executive in the know on the condition of anonymity as the talks are still in private domain.
Thomson did not respond to an email sent on Friday seeking comment. Advent, Abraaj, TPG Growth and Temasek declined to comment.
Earlier this year, Advent mandated global independent investment bank Moelis & Co and Capital Fortunes to sell its threeyear-old investment. The process had seen wide interest in the initial round from financial and strategic partners, including two consortia such as PD Hinduja Hospital and Everstone Group as well as South African healthcare chain Netcare and Bain Capital. China's Fosun Group, Malaysia's IHH Healthcare Bhd, private equity heavyweights Carlyle and domestic rivals like Manipal Hospitals had also evinced interest, but dropped out during the successive rounds.
Thomson, a 35-year-old healthcare group, has been looking to expand across the region and found India as a key market, sources said. Thomson Medical is an established
gynaecology and obstetrics medical facility in Singapore. It has no presence in India.
In India, the bed availability was nine per 10,000 people in 2012, which was significantly lower than the World Health Organisation guideline of 30 beds per 10,000. To meet this global standard, India will need to invest over Rs 14 lakh crore, said Crisil recently.
Founded in 1997 by Dr B Soma Raju and a team of cardiologists, CARE Hospitals also runs a network of telemedicine hubs in rural Andhra Pradesh and Maharashtra. Its founders developed Asia's first indigenous coronary stent. Owned and managed by Quality CARE India Ltd, the chain has operations in Hyderabad, Secunderabad, Visakhapatnam, Raipur, Pune, Nagpur, Bhubaneswar, Jabalpur and Surat, its website showed, according to its website.