Apollo HealthCo secures major investment, announces strategic merger to boost healthcare services in India

Apollo HealthCo Limited (Apollo 24|7), a subsidiary of Apollo Hospitals Enterprise Limited (AHEL), has taken significant strides in expanding its healthcare services by securing an investment of INR 2,475 Crores from Advent International. This investment is part of a strategic merger with Keimed Private Limited, India’s leading wholesale pharma distributor, aiming to create one of the largest integrated healthcare platforms in the country.

The investment by Advent International, a renowned global private equity firm, involves purchasing compulsory convertible instruments that will result in a 12.1% stake in the newly merged entity. This valuation puts the combined enterprise at an impressive INR 22,481 Crores. Apollo 24|7 is valued at INR 14,478 Crores, while Keimed comes in at INR 8,003 Crores. Post-merger, Keimed shareholders will hold up to 25.7% of the combined entity, with AHEL retaining a controlling interest of at least 59.2%.

This merger is poised to significantly enhance Apollo 24|7’s business model, providing a pan-India presence and unlocking substantial business synergies. Expected to be EPS accretive from the first year, the merger highlights a strategic expansion in Apollo 24|7’s capabilities to deliver comprehensive healthcare solutions across India.

Dr. Prathap C Reddy, Chairman of Apollo Hospitals Group, emphasized the mission to deliver affordable, high-quality healthcare across India. He noted the rapid growth of Apollo 24|7, which now serves over 33 million Indians. “With Advent’s investment and the merger with Keimed, we are set to become a leader in retail health in India,” Dr. Reddy stated.

Shobana Kamineni, Executive Vice Chairperson of AHEL, highlighted the strategic importance of leveraging the Apollo brand to further scale operations. She expressed excitement about the merger’s potential to offer quick and reliable access to genuine medicines nationwide, stating, “The size of the merged supply chain will allow 1.4 billion Indians access to genuine medicines within 24 minutes to 24 hours, seven days a week.”

Suneeta Reddy, Managing Director of AHEL, discussed the significant impact of the merger on the company’s growth, projecting that the combined entity will generate revenues of INR 25,000 Crores within three years, with an EBITDA of 7-8%.

Shweta Jalan, Managing Partner and Head of Advent India, praised the partnership, emphasizing Advent’s commitment to the healthcare sector in India and their enthusiasm for accelerating Apollo’s growth. Pankaj Patwari, Managing Director at Advent India, also expressed excitement about the potential of the combined entity to redefine health-tech platforms in India and globally.

The transaction was advised by Veda Corporate Advisors exclusively for financial aspects, while legal advisories were provided by Shardul Amarchand Mangaldas & Co for Apollo 24|7, AZB & Partners for AHEL, and Cyril Amarchand Mangaldas for Advent.