Q3 FY’23 in Review — Key Transactions in the Hospitals Space
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Mergers and acquisitions (M&A) activity in the hospitals sector in India continued to be robust in the third quarter of 2022, with several major deals taking place. This trend is a reflection of the growing demand for quality healthcare services in India, driven by a rising middle class, an aging population, and an increased focus on healthcare and wellness.
Several key insights and trends can be observed from the M&A activity in the hospitals sector in India during Q3 of 2022. Firstly, there is a growing trend of consolidation in the sector, as larger players seek to acquire smaller competitors to gain market share and expand their offerings. This trend is likely to continue in the coming years, as the Indian healthcare market becomes increasingly competitive.
Secondly, there is a growing interest from international investors in the Indian healthcare market — this trend is likely to continue, as international investors seek to tap into the growing demand for healthcare services in India.
Thirdly, expansion through Greenfield investments is becoming increasingly expensive due to skyrocketing land prices and lack of available land bank and hence there is an emerging preference to expand through the M&A route.
And lastly, both Multi and Single Specialty Hospital Chains are pursuing aggressive M&A to increase geographic footprint; Cross — Specialty M&A is helping larger chains expand their portfolio of treatment offerings to attract a larger patient base especially when it comes to expanding into Tier-2, 3 towns.
Below is a snapshot of some major transactions
1. Sukoon (Series B, $15M) — Sukoon delivers evidence-based, globally accredited care to mental patients and has raised $15M from Lightrock with the aim of India’s largest therapeutic behavioural health platform. It will use the funds to scale to multiple locations and expand specialist services
2. Eye — Q (Conventional Debt, $10M) — Eye-Q is a super-specialty ophthalmology hospital with 40+ clinics across 5 states and has raised debt funding from DFC to expand geographically to Tier-2,4 towns. It intends to provide quality services within & beyond the Indian subcontinent by developing more centers — beyond its current 39 centers — to sustain growth momentum and create access in underserved areas
3. Garg Ophthalmic Centre (M&A, Undisclosed) — Garg Ophthalmic centre is a super specialty ophthalmology care provider in UP with state-of-the-art technology. This acquisition was made to increase the geographical footprint of ASG Hospitals in UP
4. Kapil Eye Hospital (M&A, Undisclosed) — KEH is a premier super specialty eye hospital in Haryana. This acquisition enabled ASG Hospitals’ entry into Haryana. With these 2 acquisitions, ASG Hospitals’ presence has expanded to a network of ~50 hospitals nationally and they are looking to aggressively expand their footprint. These synergies from such partnerships materialize from ASG’s expertise in scaling operations and leveraging best practices across their pan-India network.
5. AyurVAID (M&A, $3M) — Apollo Hospitals acquired a majority stake (60%) in Chennai based AyurVAID with the aim of collaborating to build path breaking research in integrative medicine through clear differentiated research methodology to establish credible evidence for Ayurveda’s safety and efficacy
In conclusion, M&A activity in the hospitals sector in India continued to be robust in Q3 of 2022, driven by a growing demand for quality healthcare services in the country. The key insights and trends observed from this activity include consolidation in the sector, aggressive M&A by corporate players, and a focus on specialized areas of healthcare. These trends are likely to continue in the coming years, as the Indian healthcare market continues to grow and evolve.
Q3 FY’23 in Review — Key Transactions in the Hospitals Space was originally published in LoEstro Advisors on Medium, where people are continuing the conversation by highlighting and responding to this story.
