In confirmation of another CNBC-TV18 newsbreak, leading corporate hospital chain Aster DM Healthcare Ltd on Tuesday (November 28) announced that its subsidiary, Affinity Holdings Private Ltd, is set to divest its stake in Aster DM Health FZC to Alpha GCC Holdings for $1.01 billion.

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The consideration for this deal amounts to $1.01 billion, with $903 million, subject to customary adjustments, payable at closing. An additional sum of up to $98.8 million may be received subsequently, contingent upon specific events. This includes an earnout of up to $70 million, based on the EBITDA achieved by the GCC business for the financial year ending March 31, 2024.

The buyer entity, Alpha GCC Holdings Ltd, will be jointly owned by the promoter of Aster India and funds managed by Fajr Capital Advisors Ltd, with a shareholding ratio of 35:65 at the close of the transaction. The sale is anticipated to be completed in the fourth quarter of the financial year ending 2024, Aster DM Healthcare said in a regulatory filing.

In a statement, Aster DM Healthcare said it will separate its India and Gulf businesses by way of a deal worth over $1 billion. The company said it has received approval from its board and subsidiary Affinity Holdings Pvt Ltd to separate the India and GCC businesses into two distinct and standalone entities.

Under the separation plan, Affinity has entered into a definitive agreement with a consortium of investors led by Fajr Capital, a private equity firm headquartered in the UAE, to invest in Aster's GCC business.

As per the deal, a consortium led by Fajr Capital will acquire a 65% stake in the ownership of the GCC business, Aster DM Healthcare FZC. The Moopen family will continue to manage and operate the GCC business retaining a 35% stake, on and from closing, it added. The current market cap of the combined India and GCC business stands at $2 billion, it said.

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Upon completion, the separation of the India and GCC businesses will establish two distinct regional healthcare entities that will benefit from the strategic and financial flexibility to focus on growing market demand and the priorities of patients, the company said.

Both the India and GCC entities will be operated by separate dedicated management teams and will also benefit from a dedicated investor base that will aid future growth in the Indian and GCC markets respectively, both of which hold significant growth potential, it added.

Founded in 1987 from a single clinic in Dubai, Aster DM has a strong presence across primary, secondary, tertiary, and quaternary healthcare and runs 33 hospitals, 127 clinics, 527 pharmacies, and 229 labs and patient experience centres in six Gulf countries and India.

The company has been expanding in India and plans to add hundreds of hospital beds here through 2026, according to its latest investor presentation. It employs over 31,220 people, including close to 4,000 doctors and over 9,200 nurses.

Shares of Aster DM Healthcare Ltd ended at ₹332.65, down by ₹4.75, or 1.41%, on the BSE.

(Edited by : Shoma Bhattacharjee)

First Published:Nov 28, 2023 8:04 PM IST