India Development News & Foreign Investment Opportunities

Max-Radiant merger backed by global expertise

Prudent financial and capital management


Prudent financial and capital management


Source: Radiant Life.



The acquisition cum merger of Max Healthcare and Radiant Life Care will be supported by extensive global experience and expertise in healthcare investments as well as capabilities in prudent financial management and efficient capital allocation in India.

With quality healthcare outpacing India’s economic growth, Radiant Life Care Private Limited said it has entered into a transaction whereby its shareholders will eventually acquire a majority stake in Max Healthcare Institute Limited from Max India Limited.

The merger offers significant growth potential with revenue and cost efficiencies to be extracted, said KKR India which backs Radiant Life in the venture as its leading shareholder.

Sanjay Nayar, Member & CEO of KKR India, supports the merger: “We are excited to back Radiant’s efforts towards consolidation in the healthcare sector by helping them create an effective platform in India for the highest-quality healthcare service providers, best in class infrastructure, practices, doctors and management teams.

“The country’s private hospital market has grown rapidly in recent years, and we expect demand for quality healthcare to outpace overall economic growth as Indians demand better quality care. The combined business will enjoy a leadership position amongst the attractive metros of Delhi and Mumbai,” said Nayar.

KKR will also acquire an additional stake of 4.99% in the Merged Entity from Max Promoters, funded primarily from KKR Asian Fund III. KKR will co-promote the new group.

KKR took 49% stake in Radiant Life with US$200 million in July 2017 and sets a potential investment model for international investors as Indian healthcare sector consolidates to offer world-class services.

Radiant Life said it plans to acquire Max Healthcare Institute which is valued at Rs.4,298 crore. Radian Life, valued at Rs.2,944 crore, manages 650-bed BLK Super Specialty Hospital in Delhi and 350-bed Nanavati Hospital in Mumbai. Max India has 14 facilities with 2,400-bed across India.

The acquisition will be undertaken through a series of transactions, including Radiant’s purchase of a 49.7% stake in Max Healthcare from South Africa-based hospital operator Life Healthcare in an all cash deal.

It will be followed by demerger of Radiant’s healthcare assets into Max Healthcare which will result in KKR and Radiant promoter Abhay Soi together acquiring a majority stake in Max Healthcare.

The combination of Radiant and Max Healthcare will create the largest hospital network in North India, which will become among the top three hospital networks by revenue and the fourth largest in terms of operating beds in the country, said a KKR statement on 24 Dec 2018.

The merged entity will operate over 3,200 beds throughout 16 hospitals across India, including tertiary and quaternary care facilities offering high end critical and super speciality care supported by strong local brands such as BLK Hospital, Max Saket Hospital, Max Smart Hospital, Max Patparganj Hospital, and Nanavati Hospital.

The combined business is expected to provide significant growth potential and compelling business synergies. By providing best-in-class patient care, the combined business plans to address India’s growing demand for quality medical treatment.

Upon closing, Abhay Soi, Chairman and Managing Director of Radiant, will lead the combined company as its Chairman, supported by a strong leadership team.

Soi said: “Radiant has achieved significant growth and expansion during a time of rapid industry consolidation, and the proposed acquisition of a majority stake in Max Healthcare marks an exciting step forward in our strategy to increase scale by merging with a leading and complementary hospital network.

“We are fortunate to have strong support from KKR as we continue our mission of providing superior medical services in India,” said Soi.

Analjit Singh, Founder & Chairman Emeritus of Max Group, added: “Max Healthcare has been an integral part of my entrepreneurial journey and I can’t think of better partners than Radiant, backed by KKR, to carry forward this legacy.”

Over the years, the healthcare business has come to be known for its consistently high level of service and clinical excellence across 14 world class facilities, and to this day, it continues to set new benchmarks in clinical quality, said Singh.

“The merger offers significant growth potential with revenue and cost efficiencies to be extracted. Both Max and Radiant possess complementary sets of capabilities in running healthcare establishments and KKR brings extensive global experience and expertise in healthcare investments as well as capabilities in prudent financial management and efficient capital allocation,” noted Singh.

The transaction will be completed through the following steps:

Prior to the merger transaction involving Radiant and Max Healthcare, Max India will demerge its non-healthcare businesses (comprising of Max Bupa and Antara Senior Living) into a new wholly owned subsidiary of Max India whose shares will be listed separately on both BSE Limited and National Stock Exchange of India Limited.

This new company will be spun off, and shareholders of Max India will receive one share of Rs.10/- each of the new company for every five shares of Rs.2/- each that they hold in existing Max India.

Following the demerger and the spin-off, Radiant’s healthcare assets will be demerged into Max Healthcare which will then undertake a reverse merger with Max India to create Merged Max Healthcare (Combined Entity or Merged Entity). As a result of the reverse merger, shareholders of Max India will receive 99 shares of the Merged Entity of Rs.10/- each for every 100 share of Rs.2/- each that they hold in Max India.

Post-merger, Max India will get dissolved without being wound up and subsequently the equity shares of the Merged Entity will get listed on both BSE Limited and National Stock Exchange of India Limited.

Based on the share exchange ratio recommended in the valuation report issued by S.R. Batliboi & Co LLP and B.S.R Associates LLP, the resultant shareholding of the Combined Entity will be 51.9%, 23.2% and 7.0% (post sale of 4.99% as mentioned below) held by KKR, Abhay Soi and Max Promoters respectively, with the balance being held by public and other shareholders.

A record date will be fixed in due course by the Board of Max India in conjunction with the Board of Radiant.

The Combined Entity will be promoted by Abhay Soi and co-promoted by KKR.

Max India’s current promoters (Max Promoters) will subsequently step down through the process of de-promoterisation after completion of the merger.

The merged entity will continue to use the current brand name Max Healthcare, with appropriate adjustments to its logo.

Consolidation of the healthcare business of Radiant with Max Healthcare in a single listed entity can create significant value for all stakeholders:

One of the top three hospital chains in India;
Attractively positioned in two large healthcare markets;
Well recognized local brands;
Promoter led strong leadership team;
Balanced vintage mix of hospitals;
Track record of robust financial performance;
Significant potential to extract cost savings, realize synergies and improve margins;
Strong platform to consolidate through acquisitions of attractive healthcare assets.


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