Fortis Healthcare Limited on Thursday announced the signing of definitive agreements for the sale of its hospital business operations at Vadapalani, Chennai to Sri Kauvery Medical Care (India) Limited for a sale consideration of Rs. 152 Crore.
According to the company’s press statement, the transaction will be an all-cash deal and is estimated to be consummated by end of July 2023, subject to certain conditions as stipulated in the definitive agreements.
The facility, which is on leased premises, was commissioned in October 2020 and is located on the arterial Arcot Road. It currently has 110 operational beds with a potential to scale up-to approx. 200 beds.
The divestment is a part of the Fortis’ ongoing portfolio rationalization strategy in order to focus on deepening its presence in select geographic clusters where it has a sizeable presence.
According to the hospital group, the acquisition of Vadapalani facility is in line with Kauvery’s strategy to further expand its presence in Chennai, in addition to its existing facilities of 500+ beds at Alwarpet and Radial Road.
“The divestment of Arcot Road hospital business operations is in line with our stated intent of optimizing our hospital assets keeping in mind our key markets and regions. This also underpins our focus on improving our overall profitability and margins in the segment, allowing us to re-allocate capital in our key clusters,” Dr. Ashustosh Raghuvanshi, Managing Director & CEO, Fortis Healthcare Limited, said in a statement.
For Fortis, Saraf and Partners, Law Offices acted as legal advisors and Veda Corporate Advisors acted as financial advisors for this transaction. Meanwhole, for Kauvery, Khaitan & Co and Shardul Amarchand Mangaldas & Co acted as legal advisors for this transaction.
