Fortis Healthcare to sell Fortis Malar Hospital to MGM Healthcare for Rs 128cr
Fortis Healthcare Limited, a prominent integrated healthcare service provider in India, today announced a substantial business transaction involving the sale of its Fortis Malar Hospital in Chennai to MGM Healthcare Private Limited. The deal, valued at approximately INR 1,28,00,25,000, includes the business operations, land, and building assets of the Fortis Malar Hospital.
Details of the Transaction
The transaction encompasses the divestment of the business operations of Fortis Malar Hospital, part of the listed subsidiary Fortis Malar Hospitals Limited, in which Fortis Healthcare holds a 62.7% equity stake. Additionally, the deal includes the OPD and radiology business operations, the land and building of the Fortis Malar Hospital, and an adjacent parking land parcel, all residing in two wholly-owned subsidiaries of Fortis Healthcare – Fortis Health Management Limited (FHML) and Hospitalia Eastern Private Limited (HEPL).
Fortis Healthcare to sell Chennai’s Fortis Malar Hospital to MGM in a landmark deal
Strategic Implications of the Deal
This all-cash transaction, expected to be completed by January 2024, is subject to customary closing adjustments and approvals from shareholders of both Fortis Healthcare and Fortis Malar Hospitals Limited. The divestment aligns with Fortis Healthcare’s ongoing strategy to focus on key markets and follows the previous divestment of its Vadapalani facility in Chennai.
Fortis Malar Hospital’s Legacy and Challenges
The Fortis Malar Hospital, a 140-bed facility, has been addressing several legacy issues over the years. Despite resolving many challenges, persistent legacy aspects have constrained further investments, leading to the decision to divest the facility.
MGM Healthcare’s Expansion Plans
For MGM Healthcare, the acquisition is a strategic move to expand its presence in Chennai. This acquisition, along with its existing facilities and a greenfield hospital under development, will bring MGM Healthcare’s total bed count in Chennai to approximately 800 beds.
Leaders’ Perspectives on the Transaction
Dr. Ashutosh Raghuvanshi, Managing Director & CEO of Fortis Healthcare, emphasized the divestment as a step towards optimizing their hospital asset portfolio. Dr. Prashanth Rajagopalan, Managing Director of MGM Healthcare, expressed MGM’s commitment to restoring and advancing the Fortis Malar Hospital.
Advisors for the Transaction
Saraf and Partners Law Offices and Shardul Amarchand Mangaldas acted as legal advisors for Fortis Healthcare and Fortis Malar Hospitals Limited, respectively, while Veda Corporate Advisors provided financial advisory services. JSA Advocates & Solicitors were the legal advisors for MGM Healthcare.