Radiant Life To Merge With Max Healthcare

Radiant Life Care Ltd., backed by private equity firm KKR, agreed to merge with Max Healthcare Ltd. in a complex deal that, it said, will make the combined entity India’s third-largest hospital and diagnostics company.

The merged entity will operate over 3,200 beds through 16 hospitals across India and will be among the top three by revenue and the fourth-largest by beds, according to a company statement. The combined entity will be valued at Rs 7,242 crore.

This is how the multi-step transaction is structured:

• Radiant Life will buy 49.7 percent in the publicly listed Max Healthcare from South Africa-based hospital operator Life Healthcare in an all-cash deal. At the same time, Analjit Singh-promoted Max India Ltd. will demerge healthcare and investment businesses into separate entities.
• Radiant Life will then merge with the Max Healthcare, giving KKR and Radiant promoter Abhay Soi the majority stake in the combined entity. The healthcare business will be 51.9 percent owned by KKR, 23.2 percent by Abhay Soi and 7 percent by Max India promoters. The Max promoters will sell 4.99 percent in the combined entity to KKR at a later stage at Rs 80 apiece, Soi told BloombergQuint over the phone.
• The spun-off investment business of Max India will continue to hold stakes in Max Bupa Health Insurance, Pharmax Corporation, Antara Senior Living, Max Ateev, Max UK and Max Skill First. It will be separately listed after the healthcare merger.
• The shareholders of Max India will receive one share in the investment business for every five held in Max India.

The merger offers significant growth potential with revenue and cost efficiencies to be extracted, said Max Group Founder Analjit Singh. “Both Max and Radiant possess complementary sets of capabilities in running healthcare establishments and KKR brings with it extensive global experience and expertise in healthcare investments as well as capabilities in prudent financial management and efficient capital allocation.”

Radiant wants to capitalise on its “significant growth and expansion” at a time when the healthcare industry is rapidly consolidating, Soi said in the media statement.