It is being billed as a big deal by an Indian healthcare provider. The Rs 2,200 crore deal announced by Bengaluru-headquartered Narayana Health on Friday, October 31st, is being described by many, especially within the official circles and by some analysts as a deal that is perhaps timed well. While it aims to expand its clinical range of services, the acquisition is being seen as one that arguably showcases Indian healthcare skills and heft in the global arena.
Commerce and industry minister Piyush Goyal describes the deal on social media as one that showcases India’s healthcare delivery system continuing to strengthen its global presence.
From a financial perspective it is an all cash transaction that entails acquiring 100 per cent equity stake in the London-headquartered Practice Plus Group Hospitals. What adds weight to the deal is the fact that Practice Plus is a critical partner to Britain’s National Health Service (NHS), UK’s beloved albeit hugely burdened healthcare provider. About 93 per cent of Practice Plus Group Hospitals’ revenues come from services to the NHS, which has been increasing its outsourcing of services and speed up healthcare delivery.
Practice Plus Group operates 12 hospitals including surgical centres and specialises in high quality orthopaedics, ophthalmology and general surgery. According to a note shared by Narayana, this “strategic acquisition extends Narayana Health’s global reach, placing the company amongst the top three healthcare providers in India by revenue.\
Practice Plus Group of hospitals is the fifth largest private hospital group in UK, performing around 80,000 surgeries a year. Through this acquisition, Narayana Health gains access to the UK healthcare market, where demand for surgeries, specially in the private sector, is projected to grow significantly in the coming years.”
According to those who have looked at the deal closely on the synergies that could entail, Narayana hopes to leverage its Athma software platform and broader digital capabilities to improve patient outcomes and throughput. Also, it is argued that since the UK entity is also a believer in scaling a low-cost, efficient model, it could be an ideal base for Narayana Health to build upon and possibly unlock the next level of operational efficiencies.
The acquisition will be carried out by Narayana Hrudayalaya UK Ltd, a wholly owned subsidiary of Health City Cayman Islands Ltd.
The note by Narayana says the two parties share the same vision and value systems: healthcare needs to be affordable and accessible to all. It then goes on to quote Dr Devi Prasad Shetty, Founder and Chairman of Narayana Health, as saying, “the acquisition of Practice Plus Group hospitals and surgical centres is an incredibly exciting step for Narayana Health. Like Narayana Health, Practice Plus Group recognised that the majority of patients were struggling to access healthcare, while only a minority could afford costly private healthcare. We have both been working to meet the demands of those in between, and to offer a new choice of more accessible private healthcare. Together, we are a perfect fit.”
Jim Easton, Practice Plus Group Chief Executive, said, “Dr. Shetty and Narayana Health have an enviable reputation for high quality, efficient healthcare with a human touch and I’m excited about what Practice Plus Group’s hospitals and surgical centres can achieve with the commitment and expertise of Narayana Health behind
us.”
With this integration, the note says, Narayana Health is well-positioned to bring the hospital division of Practice Plus Group into its ecosystem, leveraging its robust technology foundation to drive innovation, operational excellence, and long-term value creation for patients, partners, and stakeholders.