Radiant Life Care and KKR to acquire majority stake in Max Healthcare

Max India said on Monday it will sell a stake in its healthcare services joint venture Max Healthcare Institute to Radiant Life Care, an Indian hospital management company backed by global investment firm KKR.

"Radiant Life Care has entered into a transaction whereby its shareholders will acquire a majority stake in Max Healthcare from Max India," the company said in a filing to the Bombay Stock Exchange.

The healthcare company said the acquisition will be undertaken through a series of transactions, including Radiant's purchase of a 49.7 per cent stake in Max Healthcare from South Africa-based hospital operator Life Healthcare in an all cash deal. This would be followed by demerger of Radiant's healthcare assets into Max Healthcare which will result in KKR and Radiant promoter Abhay Soi together acquiring a majority stake in Max Healthcare.

The combined entity, which will be promoted by Abhay Soi and co-promoted by KKR, will continue to use the current brand name Max Healthcare, with appropriate adjustments to its logo.

Max India said that the combination of Radiant and Max Healthcare will create the largest hospital network in North India, which will become among the top three hospital networks in India by revenue and the fourth largest in India in terms of operating beds. The merged entity will operate over 3,200 beds throughout 16 hospitals across India, it added.

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Commenting on the development, Abhay Soi, Chairman and Managing Director of Radiant, said, "Radiant has achieved significant growth and expansion during a time of rapid industry consolidation, and the proposed acquisition of a majority stake in Max Healthcare marks an exciting step forward in our strategy to increase scale by merging with a leading and complementary hospital network. We are fortunate to have strong support from KKR as we continue our mission of providing superior medical services in India."

Prior to the merger transaction involving Radiant and Max Healthcare, Max India will demerge its non-healthcare businesses (comprising of Max Bupa and Antara Senior Living) into a new wholly owned subsidiary of Max India whose shares will be listed separately on both BSE Limited and National Stock Exchange of India Limited.

This new company will be spun off, and shareholders of Max India will receive one share of Rs 10 each of the new company for every five shares of Rs 2 each that they hold in existing Max India.

Following the demerger and the spin-off, Radiant's healthcare assets will be demerged into Max Healthcare which will then undertake a reverse merger with Max India to create Merged Max Healthcare.  As a result of the reverse merger, shareholders of Max India will receive 99 shares of the Merged Entity of Rs 10 each for every 100 share of Rs 2 each that they hold in Max India.

Following the announcement, shares of Max India fell 4.32 to close at Rs 80.80 per share on the Bombay Stock Exchange on Monday.

Edited by Chitranjan Kumar