Blackstone's Health Platform Quality Care Set to Acquire KIMS Kerala for INR 3,500 Cr

QCIL, a CARE Hospitals network operator, will acquire an 80-85% stake in KIMS, making it India's fourth-largest hospital group with nearly 3,800 beds, following Apollo Hospitals, Manipal Health, and Fortis Healthcare.

Quality Care (QCIL), a hospital platform owned by private equity fund Blackstone, is set to acquire KIMS Health Management (KHML), a leading hospital chain in Kerala, India. The deal values KHML at INR 3,500 Cr (approximately $400 million). 

QCIL, which operates a network of CARE Hospitals, will hold an 80-85% stake in KIMS after the acquisition. Dr MI Sahadulla, the founder and promoter of KIMS, will retain a 15-20% stake and continue to manage the hospital business. 

Following the acquisition, QCIL will own nearly 3,800 beds, becoming the fourth-largest hospital group in India, trailing Apollo Hospitals, Manipal Health, and Fortis Healthcare.

KIMS Health Management currently operates four hospitals in Kerala, located in Trivandrum, Kottayam, Kollam, and Perinthalmanna, with a combined capacity of 1,378 beds. Additionally, they are working on a 300-bed hospital in Nagercoil, expected to be operational by March 2024. 

In the fiscal year 2024, KIMS is projected to achieve Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of INR 300 Cr and revenue of INR 1,000 Cr.

This follows Blackstone's acquisition of a majority stake in QCIL earlier this year when they purchased about 73% from Evercare, backed by TPG Growth. This deal valued QCIL at $800 million (INR 6,600 Cr), making it Blackstone's debut investment in the Indian healthcare sector. QCIL is part of the South Asia healthcare market, with 15 hospitals in India and two in Bangladesh.

The deal has been in the works for some time, with Blackstone emerging as the frontrunner to acquire KHML earlier this year. QCIL's acquisition of the majority stake from existing investors, including True North, further solidified the transaction. 

The acquisition strengthens Blackstone's presence in India's healthcare sector and signals the private equity giant's commitment to investing in the country's growing healthcare industry.

The healthcare industry in India has witnessed a surge in investment and activity, driven by increasing demand for quality healthcare services, especially in the wake of the COVID-19 pandemic. 

As hospital chains expand and modernise, partnerships and acquisitions like the one between QCIL and KIMS Health Management are becoming more commonplace, further fuelling the growth of India's healthcare infrastructure.

In another M&A development in the healthcare sector, Morgan Stanley entered the Indian Healthcare Space by acquiring Gurugram-based ClearMedi Healthcare for INR 285 Cr. ClearMedi runs a chain of oncology hospitals and radiation therapy centres.  

Morgan Stanley's backing injects substantial momentum into ClearMedi's market presence. Leveraging Morgan Stanley's extensive financial expertise and resources, ClearMedi strategically positions itself to expand its reach, invest in innovative technologies, and uphold its commitment to delivering healthcare services to its clients.