Olympus Invests $100M In DM Healthcare; India Value Fund Part-exits
Jan 18, 2012. VC Circle
Olympus Capital Asia Investments Ltd has invested over Rs 500 crore ($100 million)
for a significant minority stake in India Value Fund-backed DM Healthcare Pvt Ltd,
in one of the single largest private equity investments in the healthcare business
till date. DM Healthcare is a Kochi-based healthcare services provider with operations
in India and the Middle East.
With this investment, Olympus Capital will become the company’s biggest external
investor even as the existing promoters will continue to be the largest shareholders
in the company.
The transaction is a combination of Olympus Capital’s primary investment into DM
Healthcare for the growth and expansion of the company in India and secondary purchase
of a portion of India Value Fund’s shareholding in the company.
India Value Fund had originally invested around $50 million in DM Healthcare four
years ago and held around 22 per cent stake in the company, according to VCCedge,
the financial research platform of VCCircle.
Assuming Olympus Capital acquired around 25-30 per cent in the company, the deal
values DM Healthcare at around $400 million. In contrast, the two top-listed healthcare
services firms in the country – Fortis Healthcare and Apollo Hospitals – command
a market cap of around $755 million and $1.68 billion, respectively. Fortis Healthcare
is backed by Singapore’s sovereign wealth fund GIC while Apollo Hospitals is backed
by Apax Partners and Malaysian sovereign wealth fund Khazanah.
This also happens to be the single largest private equity deal in healthcare sector
in India till date. Although Apax Partners had invested around a similar sum in
Apollo Hospitals five years ago, the Indian currency was much stronger against the
US dollar. The Apax-Apollo deal was for $104 million or around Rs 425 crore back
then. The latest deal is around Rs 510 crore.
Gaurav Malik, managing director of Olympus Capital, said, “DM Healthcare is addressing
the challenge of providing world-class healthcare services in the rapidly growing
markets of India and the GCC countries. A combination of increased consumer spending
and high prevalence of chronic diseases is expected to lead to significant growth
in the healthcare industry in these markets.”
Established in 1987, DM Healthcare is one of the leading healthcare service providers
in the GCC countries, with the largest network of medical centres, hospitals and
pharmacies, and it owns and operates secondary and tertiary care hospitals in India.
The company, with revenues of over Rs 1,200 crore, owns and operates the largest
network of hospitals, clinics and pharmacies in the UAE under Aster and Medcare
brands. It also has significant operations in Qatar, Oman and Saudi Arabia. In Saudi
Arabia, it operates through a joint venture with a conglomerate and has already
acquired a large and reputed hospital in the country.
In India, DM Healthcare has over 900 operating beds, primarily in tier 2 and tier
3 cities. The company is setting up a large quaternary care hospital with complex
and specialised care in Kochi (Kerala), which will attract patients, as well as
doctors, from India and abroad. The project, named Aster Medcity, will have a core
hospital and nine centres of excellence. The facility is expected to commence operations
in 2013.
The outlay for the first phase of this project is approximately Rs 500 crore. In
addition, DM Healthcare will set up greenfield projects and partner with smaller
hospitals across other tier 2 and tier 3 cities in India, with a target of having
close to 3,000 beds by 2015.
Azad Moopen, who continues to hold the majority stake in the company, said, “We
remain optimistic about the business prospects of the healthcare sector and along
with India Value Fund, are delighted to partner with Olympus Capital. With the strong
support of our investors and our experienced management team, I am confident that
DM Healthcare is positioned for continued growth in the healthcare sector in both
India and the GCC region.”
Sunil Theckath, Partner at India Value Fund said, “India Value Fund has had a long
and fruitful partnership with DM Healthcare over the last four years and we remain
committed to the company. We believe the management team is capable of further expanding
the company’s footprint aggressively and this partnership with Olympus Capital will
strengthen the company’s ability to execute its growth plans.”
Veda Corporate Advisors Pvt Ltd was the exclusive advisor to DM Healthcare on the
latest transaction. Veda had also advised the company in its previous round of fundraising
from India Value Fund in 2008.
Olympus Capital, a regional Asian middle market private equity firm established
in 1997, has been investing in India since 1999. Its current investments in India
include Vishwa Infrastructure, Quatrro BPO Solutions and Orient Green Power.
Aureos South Asia Fund invests in rapidly growing Indian paper packaging company
Jan 31, 2012. Aureos Capital
The Aureos South Asia Fund (“ASAF”) has completed a US$7 million investment in Sai
Security Printers Private Limited ("Sai"). Sai is a leading paper packaging company
based in Faridabad and Bangalore, India.
ASAF is managed by Aureos South Asia Managers Ltd, a subsidiary of Aureos Capital
Limited, a private equity fund management company specialising in investing in small
and medium sized businesses in emerging markets.
Sai started out as a security printing business and transformed itself into a multi-product
packaging company, manufacturing labels and mono-cartons for food and beverage,
pharmaceutical and FMCG industries. The company employs 600 people and has seen
its paper packaging arm increase to 76% of revenue in 2011. There are plans in place
to open a new facility at Bangalore and expand the existing facility in Faridabad,
Harayana.
Balaji Srinivas, Managing Partner, Aureos India, says: "Sai has a strong customer
base, marked by high customer retention. Its strategy for future development includes
expansion into recession resilient and higher margin products for the pharmaceutical,
beverages and FMCG sectors."
"Our team will work closely with Sai's experienced management team helping it to
become a major player across geographies in the Indian packaging market. We look
forward to working with Sai to enhance the company’s already excellent credentials."
Vijay Raghavan, MD, Sai Security Printers, says: "We are delighted to have Aureos
as our financial partner in taking Sai (including it's division Sai Packaging Company)
on its next growth trajectory. Sai will use the funds to build on its already strong
production and technology capabilities and will work towards moving into new markets,
adding new customers and providing end-to-end packaging and printing solutions to
its customers while increasingly focussing on high margin business. We believe that
there is a large opportunity in the domestic and export markets for firms that are
willing to invest in innovation and quality and Sai is well positioned to take advantage
of that."