Fortis Global Healthcare, an unlisted firm promoted by Malvinder Singh and Shivinder Singh, has acquired 28.6% stake in a leading Colombo listed Sri Lankan hospital, Lanka Hospitals Corporation, formerly owned by its rival at home and the largest hospital chain of India, Apollo Hospitals. Singhs have shelled out $36.3 million (R 162 crore) for the stake. The acquisition is part of a larger strategy of promoters of India’s second largest hospital chain — Fortis Healthcare, to create a pan Asian integrated healthcare network through its overseas invesment arm Fortis Global Healthcare. To pursue its dream, Fortis has already invested over R 1,600 crore in last five months, inclusive of its latest buy in Sri Lanka.
This Sri Lankan entry marks Fortis Global's foray into one of Asia's fastest growing economies.Malvinder Mohan Singh, executive chairman of Fortis Global Healthcare said, “Lanka Hospitals is the first step for Fortis Global to build its healthcare business interest in one of the fastest growing economies in Asia. It is one of the most advanced and comprehensive healthcare facility in Sri Lanka. We believe there are tremendous opportunities for the hospital’s expansion and we will support the company’s management in realising such growth. Lanka Hospitals is a multispeciality 350-bed tertiary hospital that specialises in cardiology and cardiac surgery, neuro-sciences, orthopedics, urology and nephrology procedures. The hospital which was commissioned as a branch of Apollo Hospitals in 2002 and bore Apollo's brand and logo till as late as 2009, is now majority owned by Sri Lanka Insurance Corporation, a government of Sri Lanka company. Apollo had exited the firm in 2006 but continued as a technical partner under a licensing and support services arrangement which expired in November 2009. It was then rechristened to Lanka Hospitals. As on Friday, the Srilankan entity had a market cap of close to R 472 crore.
With this buy, Fortis would expand footprint to a new geography. Starting November 2010, Fortis acquired the largest private primary care company Hong Kong for R 882 crore, invested R 450 crore to acquire a 30% stake in the largest dental care company in Australia, which it is in the process of taking over and announced the acquisition of a cancer speciality hospital project in Singapore for R 117 crore.
The healthcare firm is acquiring specialised healthcare businesses in different geographies of Asia-Pacific region which are also the market leaders in their regions.This alternate plan of expansion was adopted by Fortis Global after an aborted attempt of expanding through a buy out of Singapore-based Parkway Hospitals.
The Malaysian state investment fund Khazanah fought a protracted battle and finally took over the reins of Parkway.
This, however, did not deter the Singhs from pursuing their global ambitions, who are on an acquisition spree of specialised healthcare in the Asian and Australian market.
Interestingly, Khazanah also owns a stake in Apollo Hospitals and both have vowed to strengthen their relationship further in future.
Source: Financial Express