The acquisition of Max Healthcare Institute Ltd by Radiant Life Care Pvt. Ltd has put the spotlight on banker-turned-healthcare investor and Radiant Life chairman Abhay Soi. On completion of the transaction, Soi will helm India’s third-largest hospital chain by revenue. With age on his side, Soi is just getting started. “I am 45 right now and hopefully for the next 20 years I am here to stay,” he said in a telephonic interview on Monday. Max India, an equal joint venture partner in Max Healthcare with South Africa-based hospital operator Life Healthcare, told stock exchanges on Monday that Radiant will acquire a majority stake in Max Healthcare. To begin with, Radiant will acquire 49.7 percent stake in Max Healthcare from Life Healthcare in an all-cash deal. Thereafter, healthcare and investment businesses of Max India, a listed company, will be demerged into two separate entities. Radiant Life will be merged with Max Healthcare post the demerger, with KKR and Co., Soi and Max promoters holding 51.9 percent, 23.2 percent and 7 percent stake in the merged entity respectively. At a later stage, Max promoters will further sell 4.99 percent stake to KKR in the merged entity.
Radiant operates two super-specialty hospitals—Dr. Balabhai Nanavati Hospital in Mumbai and BLK Super Specialty Hospital in Delhi. Between BLK and Nanavati, Radiant has a capacity of 1000 beds. The acquisition will immediately catapult Radiant into the big league with Max Healthcare having a capacity of 2400 beds in the Delhi-NCR (National Capital Region). “We also have a large opportunity for brownfield expansion and would require Rs 1500 crore. Between Max, Nanavati and BLK we are looking at 1200 additional beds. This will be funded through debt and internal accruals and later if required we will look for fund-raise through equity,” said Soi. While the merged entity will be the third largest hospital chain in India by revenue, it will be the fourth largest in terms of number of beds. Soi is not a man in hurry. “My milestone is to be the most well-regarded and most efficient hospital and not necessarily the largest. I believe it is important to have right locations and right economies of scale in single locations rather than expanding just for the sake of it,” he said. For Soi, who started his career as a financial structuring specialist at Arthur Andersen in 1996 and later turned into a healthcare investor before beginning his entrepreneurial journey with Radiant in 2008, acquiring Max Healthcare and running will be a dream come true.
Radiant had been scouting for acquisitions to ramp up capacity for a while. It had also submitted a bid for hospital assets of Fortis Heathcare Ltd but later backed out due to excessive competition and concerns around corporate governance issues. Soi has no regrets over backing out from the race for Fortis. “I think from Day 1, when I got into healthcare business we have admired and also tried to fashion ourselves as Max rather than any other hospital chain in India. Had somebody asked me what do you want even 10 years ago, I would have said Max. It was not available then and we did not have a private equity partner,” Soi said. Soi is aware of the challenges that might come to run a large hospital platform and hence is looking to first complete the integration with Max completely before considering new acquisitions. “We are about to live our dream of having Max and in the near future we are not looking at acquisitions. This is a big acquisition for us and we need to grab it. This is going to be larger platform and while it will be an exciting opportunity, it will also be a challenge for us,” said Soi, adding that he is hopeful of the transaction closing in the next 8-12 months. – Livemint