KKR to Buy 51% Stake in Cancer Chain HCG for Rs 3,128 Crore
Bengaluru: Bengaluru-based cancer care network Healthcare Global Enterprises Ltd (HCG) is set for a major ownership transfer, as private equity giant KKR & Co. is poised to acquire a 51% controlling stake from CVC Capital Partners. Valued at approximately Rs 3,128 crore, this deal is expected to significantly reshape the specialized oncology healthcare landscape in India, strengthening HCG's expansion plans and market position.
Deal Overview
According to reports from The Economic Times, KKR plans to purchase the 51% stake at Rs 430-440 per share, representing a 14-16% discount to HCG's last closing price of Rs 511.45 on the BSE as of Thursday. Following this acquisition, KKR intends to initiate an open offer for an additional 26% stake in HCG, in compliance with Securities and Exchange Board of India (SEBI) regulations, at an estimated price of Rs 490 per share. If the open offer is fully subscribed, KKR's total ownership in HCG could increase to 77%, bringing the overall deal value to approximately Rs 4,900 crore.
Currently, CVC Capital Partners holds a 60.36% stake in HCG and will retain a 9% share post-transaction. CVC initially invested Rs 1,049 crore in HCG in June 2020 and subsequently increased its holding through an open offer.
Implications for HCG
Healthcare Global Enterprises Ltd. (HCG) is India's largest provider of cancer care, specializing in oncology-focused healthcare services. Established in 1989 and headquartered in Bengaluru, HCG operates a network of over 20 cancer centers across major cities like Bengaluru, Ahmedabad, Mumbai, Kolkata, and Chennai. The hospital chain offers advanced cancer treatment, including radiation, medical, and surgical oncology, utilizing cutting-edge technology such as CyberKnife, TrueBeam STx, and PET-CT imaging. Listed on the BSE and NSE since 2016, HCG has attracted global private equity investments from firms like CVC Capital Partners and KKR, strengthening its financial position and enabling further growth.
HCG has been on an expansion trajectory, recently acquiring MG Hospital in Visakhapatnam, a 196-bed facility with 35% margins. Additionally, the company launched a 200-bed comprehensive cancer care center in Ahmedabad and is adding 125 more beds in North Bangalore. With plans to increase capacity by 900 beds over the next four to five years, the infusion of capital and strategic oversight from KKR is expected to accelerate these initiatives, enhancing HCG's ability to provide advanced cancer care across India.
Also Read: HCG Cancer Centre Bangalore Expands to Goa with Advanced Oncology Services
KKR's Growing Healthcare Portfolio in India
ET reports that this acquisition aligns with KKR's broader strategy to expand its footprint in India's healthcare sector. In July 2024, KKR acquired a 70% stake in Kerala's Baby Memorial Hospital (BMH) for USD 300 million, marking its re-entry into the Indian hospital segment. BMH, a 500-bed facility with plans for further expansion, is among Kerala's largest hospitals. These investments underscore KKR's commitment to consolidating and enhancing healthcare services in India, aiming to create a network of hospitals that deliver high-quality medical care.
Also Read: KKR Buys Controlling Stake In Baby Memorial Hospital
The Indian healthcare sector has witnessed increased interest from private equity firms, leading to significant consolidation. KKR's strategic investments in HCG and BMH reflect confidence in the growth potential of specialized healthcare services in the region. As KKR integrates these assets, the focus will likely be on operational synergies, expansion of service offerings, and leveraging advanced medical technologies to improve patient outcomes.
This development is poised to have a substantial impact on India's healthcare landscape, potentially setting new benchmarks for cancer care and hospital management in the country.
