Aster’s India unit draws suitors valuing business at $1.5 billion

by Rahul Devi

Private equity firms BPEA EQT and Ontario Teachers’ Pension Plan Board are considering the acquisition of Aster DM Healthcare Ltd.’s assets, including its India business. This potential deal has attracted interest from various investors who see the growth potential in India’s healthcare services market.

BPEA EQT and OTPP have expressed preliminary interest in acquiring the hospital operator’s business in India. By investing in Aster’s India business, these investors aim to tap into the country’s expanding healthcare sector. However, the sources requested anonymity as the matter is still confidential.

Additionally, Blackstone Inc. and KKR & Co. are among the other interested parties considering bids for Aster’s India business. The potential acquirers may choose to collaborate, and the deal discussions could potentially lead to other transactions, including a complete buyout of the company.

In a separate development, Dubai-based private equity firm Fajr Capital is part of a consortium seeking to acquire a majority stake in Aster’s Gulf business.

According to insiders, the potential valuation for an entire acquisition of Aster could exceed $2.5 billion. The Gulf assets alone could fetch approximately $1 billion, while the India business could be valued at about $1.5 billion.

Aster’s shares have surged by around 40% this year, valuing the company at approximately $1.9 billion on the Mumbai stock exchange.

Blackstone may consider acquiring Aster’s India business through Quality Care India Ltd., in which the private equity firm received approval last month from the Competition Commission of India to purchase a 72% stake.

It is important to note that talks are still in progress, and the interested bidders may choose not to pursue a deal. Additionally, other potential bidders could emerge in the future. Representatives for Aster, Blackstone, BPEA EQT, and KKR declined to comment on the matter, while OTPP did not immediately respond to requests for comment.

Founded in 1987 with a single clinic in Dubai, Aster now operates 33 hospitals, numerous clinics, and pharmacies in India and the Gulf region. The company has been working with advisors to separate its Gulf business, as stated by Chairman Azad Moopen in an interview earlier this year.

Aster has been expanding in India and plans to add hundreds of hospital beds in the country by 2026, according to its latest investor presentation. Although more than half of Aster’s hospitals are located in India, the country only accounts for about a quarter of the company’s revenue as of the end of June.

BPEA EQT had acquired Hong Kong-based BPEA last year in the largest takeover in the private equity sector. The merger combined both firms’ Asia private equity teams to form BPEA EQT.

This article originally appeared on Bloomberg.com and offers a snapshot of the potential acquisition of Aster’s India unit. It highlights the growing interest among private equity firms to invest in India’s healthcare sector and outlines the value assessment for the possible transaction.

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