Azim Premji-backed HealthCare Global frontrunner for Sterling Hospitals

MUMBAI/BANGALORE: HealthCare Global (HCG), backed by Azim Premji and Temasek, has emerged as the frontrunner to acquire Ahmedabad-based Sterling Hospitals after entering into an exclusive due diligence process with the hospital chain, said people directly familiar with the matter.

HCG, the Bangalore-based cancer care specialist, is said to have bid about Rs 500 crore for Sterling, which is 80% owned by private equity firm Actis. The final offer would be decided after completing due diligence after a three-month period. The founder family of Paras Pharma owns the rest of the stake in the hospital chain with around 1,000 beds in Gujarat.

UAE’s largest hospital networks DM Healthcare and NMC Health, both owned by India-born entrepreneurs, are the other contenders in the fray, sources close to the matter told TOI. Kotak Mahindra investment banking is advising Actis on the potential divestment. HCG founder and chairman B S Ajaikumar was unavailable for comments while emailed queries to Actis remained unanswered at the time of going to press.

As the top bidder, HCG is looking to diversify outside its core cancer care, has a 60-day exclusivity to clinch the deal, said a source cited earlier in the report. Financial investors have backed the expansion plans of India’s emerging healthcare chains and poured over $1.16 billion last fiscal, said Venture Intelligence data.

Actis, a spin-off from UK’s development finance institution CDC, invested in Sterling seven years ago and wants to exit the company. The mid-sized private equity has scaled up the Sterling footprint across most urban centres — Ahmedabad, Rajkot, Vadodara, Bhavnagar and in Mundra SEZ — in the prosperous western Indian state.