Apollo HealthCo Secures Rs 2,475 Crore Investment From Advent International In Major Deal

Apollo HealthCo Ltd, a subsidiary of Apollo Hospitals Enterprise Ltd, has entered into an agreement with global private equity firm Advent International to raise Rs 2,475 crore, a top official said.

As per the agreement, Apollo HealthCo Ltd (Apollo 24/7 or 'AHL') would integrate 100% of its wholesale pharmaceuticals distributor firm Keimed Pvt Ltd with Advent International over the next 24 to 30 months.

A joint entity would be formed in which Advent International would pick up 12.1% stake. The combined entity would be valued at Rs 22,481 crore, as Apollo HealthCo is valued at Rs 14,478 crore and Keimed at Rs 8,003 crore.

Post the merger, shareholders of Keimed Pvt Ltd would hold 25.7% stake while Apollo Hospitals Enterprise Ltd would be the majority shareholder.

Apollo Hospitals Group Chairman Dr Prathap C Reddy said in a statement on Friday, "Our mission has been to deliver high-quality healthcare to all Indians at an affordable cost and with a high degree of reliability and trust. Apollo 24/7 has delivered on this promise and reached over 33 million Indians in a short span of time."

He added, "With Advent (International) investment and the merger of Keimed, the combined entity will be one of the leading retail health companies."

Apollo Hospitals Enterprise Ltd Managing Director Suneeta Reddy said, "We have incubated and grown Apollo 24/7 and are pleased that a marquee investor like Advent has recognised its inherent value and potential. The merger of Keimed is a significant step in the integration of the comprehensive supply chain. The combined entity will deliver Rs 25,000 crore of revenue in three years with 7-8% Ebitda."

Advent India Head and Managing Partner Shweta Jalan said, "The investment (by Advent International) demonstrates its commitment to investing in the fast-growing healthcare sector in India. We cannot wait to partner with the Apollo franchise, a household brand built with 40-plus years of hard work by the Reddy family. Leveraging our deep understanding of the industry in India and globally, we are looking forward to helping accelerate this journey."

Veda Corporate Advisors were the financial advisors for the transactions.

Shardul Amarchand Mangaldas and Company were the legal advisors to Apollo HealthCo while AZB and Partners were the legal advisors to Apollo Hospitals Enterprise Ltd. Cyril Amarchand Mangaldas was the legal advisor to Advent, the statement said.