The Apollo Hospitals division would get Rs 2,475 crore from Advent Partners

The Apollo Hospitals division would get Rs 2,475 crore from Advent Partners

Using an enterprise value of Rs22,481 crore, Advent would invest in mandatory convertible instruments across two tranches to acquire a 12.1% interest in the combined company.

With a pan-Indian footprint and the ability to create major commercial synergies, the combined company will have an industry-defining business model.

The hospital chain operator Apollo Hospitals said on Friday that private equity company Advent International will invest Rs 2,475 crore in Apollo HealthCo, a division of Apollo Hospitals.

Additionally, Apollo 24|7 has signed a framework agreement to gradually incorporate 100% of Keimed Private Limited over the course of the next 24 to 30 months.

Advent would make two tranches of investments in mandatory convertible securities to acquire a 12.1% share in the combined company, based on an enterprise value of Rs22,481 crore. Apollo 24|7 has an enterprise value of Rs 14,478 crore. With an enterprise value of Rs 8,003 crore, Keimed's shareholders will own up to a maximum of 25.7% of the merged company after the merger, with AHEL continuing to maintain the majority holding of at least 59.2%. The acquisition of further corporate permissions at the appropriate time is a prerequisite for the merger.

Keimed is a top wholesale pharmaceutical distributor with operational metrics that dominate the industry. With a pan-Indian footprint and the ability to create substantial commercial synergies, the combined company will have a business strategy that defines its sector. According to estimates, the combination with Keimed will start to increase EPS in the first year.

This is a significant turning point in Apollo 24|7's history and will bolster the organization's will to develop and expand into the most integrated, omni-channel healthcare ecosystem in India.

The deal is subject to usual approvals and prior conditions

"Our mission has been to deliver high quality healthcare to all Indians, at an affordable cost, alongside a high degree of reliability as well as trust," said Dr. Prathap C. Reddy, Chairman of Apollo Hospitals Group. In a short amount of time, Apollo 24|7 has touched over 33 million Indians, fulfilling its promise. The merged company will rank among the top retail health firms in the nation with Advent's investment and the merging of Keimed. The whole Apollo family has contributed to this, including Ms. Preetha Reddy's strategic guidance on the clinical work and Ms. Sangita Reddy's digital experience.

Apollo Hospitals Enterprise Limited's executive vice chairperson, Shobana Kamineni, stated: "With the Apollo brand, a multifaceted team, and cutting-edge technology and products, Apollo 24|7 has scaled faster than its peers in a third of the time." We can now focus even more on our strengths since today represents a new milestone. Because of the magnitude of the combined supply chain, 1.4 billion Indians will have access to real medications seven days a week, in as little as 24 to 36 hours! In order to provide industry-leading and carefully chosen omni-channel health products and enable universal access to high-quality care, the platform will keep developing and strengthening.

Apollo Hospitals Enterprise Limited's managing director, Suneeta Reddy, said, "At Apollo, we approve of putting the consumer at the heart of everything we do." We developed Apollo HealthCo on the basis of this conviction, and we are happy that a well-known investor like Advent saw the company's potential and intrinsic worth. An important step toward the integration of the whole supply chain is the merging of Keimed. In three years, the merged company will generate sales of Rs 25,000 crores, or 7-8% EBITDA. With this agreement, AHEL and its stockholders will get exponential value from a powerful alliance of skills and strengths.

"This investment demonstrates Advent's commitment to investing in the rapidly expanding healthcare sector in India, backing high quality market biggest names and working creatively alongside promoter-founders to drive value creation for all stakeholders," said Shweta Jalan, Managing Partner and Head of Advent India. We are thrilled to collaborate with the Apollo franchise, a well-known brand that the Reddy family has worked tirelessly for more than 40 years to develop. We look forward to accelerating this journey by using our extensive knowledge of the Indian and global industries.

"We are delighted to be joining the entire Apollo family because we attempt to build India's largest Omnichannel Health-tech platform," said Pankaj Patwari, Managing Director of Advent India. The combination will enable the platform to expand quickly by bringing unique size, reach, and capabilities that are unmatched in India and around the world. We are thrilled to be supporting Apollo's "Touching a Billion Lives" initiative by presenting the best of Advent.

The transactions' only financial adviser was Veda Corporate Advisors.