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Manipal Buys Columbia For Rs. 1,800 Crore

Manipal Health will also absorb Rs. 300 crore of Columbia Asia’s debt, Manipal Health’s managing director and chief executive Dilip Jose said in an interview.

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Manipal Health Enterprise Pvt. Ltd on Monday said it has agreed to buy Columbia Asia Hospital Group’s Indian assets for around Rs.1,800 crore, a move that will help the Ranjan Pai-led hospital chain expand in key markets such as the National Capital Region and Kolkata.

Manipal Health will also absorb Rs. 300 crore of Columbia Asia’s debt, Manipal Health’s managing director and chief executive Dilip Jose said in an interview.

The purchase of the assets of the Malaysian group allows Manipal to use the Columbia Asia brand for a year, during which the company will look at moving it to the Manipal brand.

The acquisition will help Manipal Health add more than 1,300 beds across 11 hospitals in India, the hospital chain said. The combined entity will have 27 hospitals across 15 cities with more than 7,200 beds, and around 4,000 doctors and more than 10,000 employees.

The merged hospital chain will treat over 4 million patients annually, according to Manipal’s statement.

Manipal Health was aided in the transaction by its investors, including private equity fund TPG Capital, through a rights issue of about Rs. 800 crore last month, while the rest of the cash for the deal will be raised through loans, Jose said.

Jose said he expects the acquisition to be completed in January, subject to approval by the Competition Commission of India.

“Columbia Asia makes a compelling strategic fit to our core values of clinical excellence, patient-centricity and ethical practices, and will help us advance our commitment to provide outstanding patient care," said Ranjan Pai, chairman of Manipal Education and Medical Group, which controls the hospital chain.

Jose said Manipal bought Columbia Asia because it helped the company strengthen its presence in Bengaluru, which is one of its core markets, and expand its presence in other parts of India like the national capital region of Delhi, Pune and Kolkata.

Allegro Capital advised Manipal Health Enterprise on the transaction while Columbia Asia was advised by Morgan Stanley.

The acquisition signals further consolidation in the healthcare space in India. Earlier this year, Radiant Life Care completed its merger with Max Healthcare Ltd, while Fortis Healthcare was acquired by Malaysia’s IHH Healthcare Bhd in 2018 after a long-drawn battle with Radiant.

Manipal Health was also in the fray to buy Fortis Healthcare and Medanta, but the deals did not materialize.

The company plans to acquire more hospital chains, Jose said.

“Greenfields are difficult in the Indian context. Buying land and constructing is going to be expensive. Land, particularly in big cities, is expensive and hard to find. So, if you are able to find assets that are well run and are looking for M&A (merger and acquisition) transactions, then it gets you faster to the market, and the risk involved in terms of delays is less," Jose said.