Radiant Life, KKR to take a majority stake in Max Healthcare via merger

Radiant Life Care Private Limited, one of the leading Indian hospital management company promoted by Abhay Soi and backed by global investment firm KKR, has entered into a transaction under which its shareholders will acquire a majority stake in Max Healthcare Institute Limited from Max India Limited. The acquisition will be undertaken through a series of transactions, including Radiant’s purchase of a 49.7 percent stake in Max Healthcare from South Africa-based hospital operator Life Healthcare in an all-cash deal, followed by the demerger of Radiant’s healthcare assets into Max Healthcare. This will result in KKR and Radiant promoter Abhay Soi together acquiring a majority stake in Max Healthcare. The Radiant-Max Healthcare combine will create the largest hospital network in North India, and the top three hospital networks in India by revenue and fourth largest in terms of operating beds, the release says.

The merged entity will operate over 3200 beds throughout 16 hospitals across India, including tertiary and quaternary care facilities offering high end critical and super specialty 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 will lead the combined company as its Chairman, supported by a strong leadership team.

As per the Composite Scheme announced by Max India, the transaction will be completed through the various 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 (The 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 SR Batliboi & Co LLP and BSR Associates LLP, the resultant shareholding of the Combined Entity will be 51.9 percent, 23.2 percent and 7 percent (post sale of 4.99 percent 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.