Fortis eyes stakes in hospital chains

Fortis may buy a minority stake in these hospital chains. The company is hoping to close the transaction in the current financial year, according to three investment banking sources, close to the development. When contacted by ET, Fortis Healthcare CEO and MD Shivender Mohan Singh said, “We are scouting for acquisitions and are very much in the market. Talks are on with various hospital chains. However, I cannot comment on any individual deal.” Fortis, which currently has 2,600 beds in 22 hospitals, wants to add 550 beds across the country, including 150 in Mumbai. A Manipal spokesperson said, “Manipal Health System is not part of any consolidation talks and is not in discussions with Fortis.” It must be mentioned that Manipal has been in the market for raising Rs 400-450 crore for some time. An e-mail sent to Wockhardt Hospital didn’t elicit a response. While confirming that Fortis has approached Manipal, banking sources said chances of Manipal doing a deal with a rival Indian player looked unlikely. Mr Singh had earlier told the media that the company was looking at a price of Rs 50-75 lakh per bed, and had earmarked a fund of around $500 million for acquisitions. Market speculation suggests that Fortis is also talking with Chennai-based CMM Hospital for a possible equity purchase. Earlier this year, Manipal Hospital was in discussions with Singapore’s Parkway Hospital for a strategic deal, but the talks fell through due to differences on valuations. Since then, it has talked to PE funds such as Arcapita, Bain Capital and ICICI Ventures for a possible deal. But discussions have not been conclusive due to current market conditions where liquidity has become a constraint. Industry officials familiar with the situation said Manipal needs about $150 million for its expansion plans into western and northern markets. Manipal has 17 hospitals under its holding company Manipal Health System. However, it does not include Kasturba Medical College. Wockhardt Hospitals is also in the market to raise funds