Advent International to Invest ₹2,475 Crore in Apollo HealthCo

29 Apr 2024 , 12:03 PM

Private equity firm Advent International plans to invest ₹2,475 Crore in Apollo Hospitals’ subsidiary, Apollo HealthCo, as announced by the hospital chain operator.

Additionally, Apollo 24|7 has entered into a framework agreement to gradually integrate 100% of Keimed Private Limited over the next 24-30 months.

Advent’s investment will be made through compulsory convertible instruments in two tranches, securing a 12.1% stake in the merged entity. The combined enterprise value is estimated at ₹22,481 Crore, with Apollo 24|7 valued at ₹14,478 Crore and Keimed at ₹8,003 Crore. Post-merger, Keimed shareholders could hold a maximum of 25.7% stake, while Apollo Hospitals Enterprise Limited (AHEL) would retain the largest controlling share of at least 59.2%.

Keimed is a leading wholesale pharma distributor with strong operating metrics. The merger aims to create a business model with nationwide presence and significant synergies, expected to enhance earnings per share from the first year.

Dr. Prathap C Reddy, Chairman of Apollo Hospitals Group, expressed optimism about the venture’s potential to become one of India’s top retail health companies, thanks to Advent’s investment and Keimed’s merger.

Shobana Kamineni, Executive Vice Chairperson of Apollo Hospitals Enterprise Limited, highlighted the platform’s ability to provide genuine medicines to 1.4 billion Indians within 24 minutes to 24 hours, 7 days a week.

Suneeta Reddy, Managing Director of Apollo Hospitals Enterprise Limited, emphasized the consumer-centric approach and the merger’s potential to generate revenue of ₹25,000 Crores within three years, with an estimated EBITDA of 7-8%.

Veda Corporate Advisors served as the exclusive financial advisors for the transactions.

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