## Promoters of Aster DM Healthcare explore stake-sale talks with private equity groups
Promoters of Aster DM Healthcare, led by Azad Moopen, have initiated stake-sale talks with private equity groups such as Blackstone and KKR, among others. The promoters are considering selling a controlling stake in their India-listed hospital chain to take advantage of the ongoing sectoral consolidation.
### Aster Healthcare’s Expanding Presence
– Aster Healthcare operates 32 hospitals, 127 clinics, 521 pharmacies, 16 laboratories, and 189 patient experience centers in seven countries in West Asia and India.
– The company has expanded its facilities from 300 in 2017 to over 885 in FY23, including hospitals, clinics, pharmacies, and labs.
– India contributes 25% of FY23 revenues and 29% of EBITDA for Aster Healthcare.
### Talks to Gather Pace
– The preliminary talks are expected to gain momentum once the Gulf business is separated from the India parent and 65% of it is sold to a consortium led by Dubai-based PE firm Fajr Capital at a $500 million valuation.
– Reuters recently reported on the Fajr Capital story, confirming the advanced stage of discussions.
### Potential Merger with Care Hospitals
– Early discussions between Blackstone and Dr. Moopen have revolved around the possibility of reverse merging the India portfolio of Care Hospitals with the listed India business of Aster.
– Blackstone is not involved in the private arbitration process between Max Healthcare and TPG-owned entity that owns Care Chain of Hospitals.
– KKR, the previous biggest backer of Max Healthcare, has also engaged in similar discussions.
### Interest from Max and Other Strategic Players
– Max Healthcare and other strategic players might show interest in entering the fray once the situation becomes clearer.
– Ranjan Pai of Manipal Hospitals was approached in the past, but talks fell through due to differences over board positions, chairmanship, and brand usage.
### Market Reaction and Potential Open Offer
– Shares of Aster DM Healthcare saw a 16% increase, the biggest single-day gain since its 2018 listing, in anticipation of the Gulf deal and reorganization.
– Any transaction will trigger an open offer for an additional 26% of shares.
– The Moopen family might retain a small stake even after giving up control for value maximization.
Please note that Aster DM Healthcare, Blackstone, KKR, and Max declined to comment on the matter.
