Apax Partners, the British private equity firm, is teaming up with Prathap Reddy, one of India's most prominent entrepreneurs, to give it a stake in the subcontinent's fast-growing healthcare industry.
Apax is investing just over $100m for an 11pc shareholding in Apollo Hospitals Enterprise, which operates more than 40 sites and claims to be Asia's largest healthcare group.
Apollo, founded by Dr Reddy in 1983, is listed on the Bombay Stock Exchange. Its new partnership with Apax cements the buyout firm's credentials as one of the world's leading investors in private healthcare businesses.
The investment by Apax may spell the end of Apollo's interest in Capio UK, the owner of the Nightingale clinic in north London which has become known as a retreat for troubled celebrities.
Capio is being auctioned by the investment bank NM Rothschild on behalf of Apax and Nordic Capital. The £300m sale process was triggered for competition reasons because of Apax's existing portfolio of British healthcare assets, which includes some of the country's leading private hospital operators.
Apollo's decision to recruit Apax as a strategic shareholder makes it unlikely that a takeover of Capio by the Indian firm would be permitted by European regulators. Apax and Apollo both declined to comment yesterday. Dr Reddy is understood to remain keen on finding a way into the British healthcare industry.
The sale of Capio is at an advanced stage, with second-round bids for the business having been lodged last week. Blackstone, BC Partners, Cinven and CVC Partners are all understood to have tabled offers.
Ramsay Healthcare of Australia is also involved in the auction and is reportedly the frontrunner to snap up Capio, which operates 22 UK hospitals.
Capio's property assets changed hands in May, when they were bought for £686m by a consortium including the Scottish property tycoon Sir Tom Hunter and HBOS.
The deals reflect a frenzy of activity in Britain's private healthcare sector in recent years, most of which has been led by private equity firms.
Apax already co-owns General Healthcare Group, the biggest private operator in the UK, alongside the South African firm Netcare, and recently sold its stake in Healthcare at Home, a leading domestic care provider, to Hutton Collins.
BUPA's UK hospitals were sold this year to Cinven, while Blackstone floated Southern Cross, a care homes group, in London last year.
Source: Telegraph