Indian mid-market private equity firm True North, previously known as India Value Fund Advisors, will invest $200 million for a 40 percent stake in the Kerala Institute of Medical Sciences (KIMS), according to a company statement.
The deal provides an exit to Bangalore-based private equity firm Ascent Capital and US life sciences venture firm OrbiMed Advisors, who acquired a 40 percent interest in KIMS in July 2012 for about INR 17 billion ($260 million; €242 million).
True North is investing its fifth buyout vehicle India Value Fund V, which closed on $682 million in 2015. Media reports last year suggested that the firm was mulling co-investments from either the Canada Pension Plan Investment Board or the Abu Dhabi Investment Authority for the transaction.
True North was not available for comment by press time.
The firm’s investment will be used to fund KIMS’ expansion plans in India and the Middle East, the statement said.
Commenting on the transaction, True North managing director Satish Chander said: “True North is very excited at the opportunity to partner with and support KIMS in its future growth aspirations. We are excited about the healthcare potential in India and the Middle East and believe that KIMS would be a good addition to our healthcare portfolio.”
Following the completion of the transaction, M. I. Sahadulla, chairman of the KIMS Group, and his management team, will continue to run the company in India and the Middle East.
KIMS, founded in 2002, is Kerala’s largest multi-speciality hospital chain with over 1,500 beds across six hospitals. The healthcare group also owns and manages two hospitals and six medical centres in Bahrain, Oman, Saudi Arabia, Qatar and United Arab Emirates.
Healthcare is a key focus area for True North, having made nine investments in the sector across its five funds. Among deals in its healthcare portfolio include medical equipment company Trivitron Healthcare, south Indian hospital group Manipal Hospitals and Dubai-headquartered DM Healthcare.
According to Bain & Company’s India Private Equity Report 2017, private equity firms in the region expect healthcare to be a key sector of investment in 2017. Sixty healthcare-related deals were recorded in India 2016, a 11 percent increase from 2015.