American private equity major KKR and Co has sold its entire 26.83-per-cent stake in hospital chain Max Healthcare Institute for Rs 9,416.50 crore via block deal on August 16, sources told CNBC-TV18. The stake sale will mark the exit of KKR from the company.
KKR will be offloading a total of 26.7 crore shares it holds in Max Healthcare. The price has been fixed at Rs 350 to Rs 361.90 a share — a discount of 3.29 per cent to its closing price on August 12, according to the deal terms. The base offer is for around 20 per cent stake or 19.3 crore shares, and the upsize option is for the remaining 6.83 per cent stake or 6.6 crore shares, it added. At the upper-end of the price band, the KKR aims to raise around Rs 9,416 crore from stake sale.
In 2018, KKR along with Mumbai-headquartered Radiant bought 49.70 per cent stake in Max Healthcare from South Africa-based Life Healthcare Group Holdings for about Rs 2,120 crore. At that time, KKR-Radiant had acquired more than 266 million shares in Max Healthcare at Rs 80 per share.
As of June, 2021, Kayak Investments, (KKR-affiliated entity) held 45.63 crore shares or 47.24 percent stake in Max Healthcare. The global equity firm has been diluting its stake in Max Healthcare over the past one year.
In September 2021, the company sold 8.44 crore shares for Rs 2,956 crore through open market transactions. Major companies including HDFC Mutual Fund, Veritas Funds Plc and SBI Mutual Fund picked up hospital chain’s shares from the market at that time.
Earlier in March 2022, Radiant, a KKR affiliate, had offloaded a 10 per cent stake in Max Healthcare Institute for nearly Rs 3,300 crore. SBI Mutual Fund, Pension Fund Global and Smaller Cap World Fund were among the buyers.
Max Healthcare shares dropped sharply on Tuesday. At 9.20 am, the stock dipped 1.3 per cent to Rs 357. The hospital group’s share has so far lowered by 18 per cent this year.
With more than 3,400 beds, Max Healthcare Institute operates 17 facilities spread across Delhi-NCR, Haryana, Punjab, Uttarakhand and Maharashtra.
Max Healthcare reported Rs 229 crore net profit during the quarter ended June, registering 11 per cent year-on-year jump. Gross revenue climbed 18 per cent year-on-year to Rs 1,473 crore during the quarter under review. “Q1 FY23 performance reflects normalisation of revenues and operating EBITDA post Omicron wave in the previous quarter. The quarter saw improvement in all operational and financial parameters. With well laid out plan for distilling payor mix and expansion plans currently underway, we expect to further build on this performance in the coming years. Moreover, we seek to employ our deleveraged Balance sheet towards inorganic growth in the near term,” said Abhay Soi, chairman and managing director, Max Healthcare Institute while announcing the results.
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