Aster DM Healthcare to separate India, Gulf businesses
New Delhi: Aster DM Healthcare on Tuesday said it will demerge its India and Gulf businesses in a deal worth over US$1 billion. The company said it has received approval from its board and subsidiary Affinity Holdings Pvt Ltd to demerge its India and GCC businesses into two separate and standalone entities.
Under the separation plan, Affinity has entered into a definitive agreement with a consortium of investors led by Fajr Capital, a private equity firm headquartered in the UAE, to invest in Aster’s GCC business.
As per the deal, a consortium led by Fajr Capital, a GCC business, will acquire a 65 per cent stake in the ownership of Aster DM Healthcare FZC, Aster DM Healthcare said in a statement.
It said the Moopen family will continue to manage and operate the GCC business while retaining a 35 percent stake.
It said the combined market capitalization of India and GCC businesses is US$2 billion.
It said the transaction values the enterprise value of the GCC business at US$1.7 billion (Rs 13,540 crore).
In a regulatory filing, Aster DM Healthcare reported that definitive agreements have been signed for the proposed transaction worth US$1.01 billion.
The company said that upon completion, the separation of the India and GCC businesses will create two distinct regional healthcare entities that will benefit from the strategic and financial flexibility to focus on growing market demand and patient preferences.
It added that both the India and GCC units will be operated by separate dedicated management teams and will also benefit from a dedicated investor base that will support future growth in the Indian and GCC markets respectively, both of which have significant growth potential. .
“The company plans to increase bed capacity in India by nearly a third, by adding over 1,500 beds by FY27. In the GCC, Aster DM Healthcare FZC will boost its expansion plans in key markets such as the UAE and Saudi Arabia, while enabling greater access to quality and comprehensive healthcare across physical and digital channels,” Aster DM Healthcare said.
Following completion, Azad Moopen will continue to oversee both the India and GCC entities as Founder and Chairman of Aster.
His daughter Alisha Moopen will be promoted to Managing Director and Group CEO of the GCC business to lead a long-term strategy that will unlock value as a pure-play GCC operating company. The Indian unit will continue to be led by Nitish Shetty as Chief Executive Officer, who will focus on the growth of the Indian business with the aim of creating value for its shareholders.
Founder of Aster DM Healthcare said, “The strategic decision to separate India and GCC operations was based on the logic of establishing appropriate value for both entities, thereby creating two purely geographically focused entities that are competitive in their respective markets. Are able to take advantage of growth opportunities.” And Chairman Azad Moopen said.
He further added: “In India, we, as the promoter, are committed to our growth plans and hence earlier this year we increased our stake to 42 per cent. “The continued investment from key institutional shareholders reflects the overall confidence in the company’s Indian business model and strategy to reach the market across all segments of the healthcare sector.”
The company expects the transaction to be completed by March 2024.
In India, Aster has a large and growing network across five South Indian states through its 19 hospitals, 13 clinics, 226 pharmacies and 251 patient experience centres.
In the Gulf, Aster has 15 hospitals, 118 clinics and 276 pharmacies in the UAE, Saudi Arabia, Qatar, Oman, Bahrain and Jordan.
