Aster DM Healthcare and Quality Care India Limited (QCIL), a prominent Indian hospital network supported by Blackstone and TPG, have formalized an agreement for a merger. This action has been sanctioned by the companies’ boards and awaits necessary regulatory, corporate, and shareholder approvals. The unified entity will be called Aster DM Quality Care Limited.
This newly combined organization will encompass four major brands: Aster DM, CARE Hospitals, KIMSHEALTH, and Evercare. It will operate 38 hospitals holding more than 10,150 beds across 27 locations, positioning it among India’s top hospital networks.
The merger aims to establish one of India’s leading hospital groups based on both revenue and bed count, reinforcing its influence throughout South and Central India. Post-merger, the entity will benefit from robust financial and operational metrics, promising enhanced margins and returns. It is set for substantial growth, utilizing its clinical expertise for continued success, with plans to add 3,500 new beds between FY24-27.
Dr. Azad Moopen, the founder and chairman of Aster DM Healthcare, expressed, “’Aster DM Quality Care’ is set to rank as a dominant healthcare player, advancing patient-centered care, innovation, and accessibility. The merger opens avenues for our medical professionals to manage broader patient demographics.”
Amit Dixit, Blackstone Private Equity’s Asia head, mentioned, “Our focus is on building a major healthcare platform in India. We’re thrilled to collaborate with the Moopen family, aligning with our governance standards and values. We trust Varun Khanna’s leadership to advance the new entity.”
Vishal Bali from TPG noted, “TPG has consistently prioritized healthcare globally and in India, and we are enthusiastic about Quality Care’s integration with Aster to form a leading multi-specialty hospital chain. Our long-term investment in India aims for healthcare advancement through consistent quality enhancement and uniform care to improve clinical results.”
Varun Khanna, QCIL’s group managing director, commented, “This merger signifies our shared cultural values and dedication to addressing bed shortages in underserved Indian locations.”
Aster is valued at a 36.6x multiple on FY24 adjusted post IND AS EV/EBITDA, while QCIL is assessed at a 25.2x multiple in the same context. In line with valuation report recommendations, the merged entity’s share distribution will see Aster Promoters holding 24.0%, Blackstone 30.7%, with the remaining 45.3% in public and other stakeholders’ hands.
Moelis & Company and Advay Capital served as financial advisors, alongside Kotak Investment Banking as the corporate advisor and Cyril Amarchand Mangaldas as legal counsel to Aster. For QCIL, NovaaOne Capital provided financial advice, with Trilegal and JSA as legal counsel, while PwC proposed the swap ratio, validated by ICICI Securities’ fairness opinion.
Menu
Menu