The Manipal group is close to acquiring a substantial stake and management control in Kochi-based Lakeshore Hospital, a super-specialty medical centre and a pioneer in medical tourism initiatives.
Sources said Manipal is likely to pick up around 40% stake for about Rs 100 crore, thus putting up a tough fight against Thailand’s healthcare tourism major Bumrungrad and at least two private equity players. The deal is yet to be ratified by the board of Lakeshore Hospital, which was originally conceived almost a decade ago by a group of senior medical professionals. It is believed that Manipal Health Systems, a part of Manipal Education and Medical Group (MEMG) which operates a chain of tertiary- and secondary-care hospitals, has emerged as the front-runner to acquire the stake in Lakeshore. Nevertheless, interest from Bangkok-based and public-listed Bumrungrad International shows the growing importance of South India on the medical tourism map. The multi-specialty Lakeshore is one of the few hospitals to have air, water and surface ambulance services. The hospital’s roof-top helipad is pressed into service to help critically-ill patients while water ambulance service caters to people living in islands around Kochi. Manipal’s likely stake buy may see it taking over administration and management duties of the hospital, which also has investments from NRI investor and promoter of Dubai-based Lulu Group, MA Yousaf Ali. Sources said some of the original medical professionals who conceived the project may exit as shareholders. Dr Ranjan Pai, CEO of MEMG, declined to comment on the impending transaction at this point of time. When queried on the possibility of a takeover by Manipal, Lakeshore Hospital finance director AJ Pai said the board of directors had not taken any decision. Sources said Manipal may have offered Rs 53 per share, which was below the asking price of Rs 60/65 per share. But what could have tilted the deal in its favour may be the fact that it did not insist on a majority stake straightway, like Bumrungrad or PE investors such as India Value Fund or IVEN Medicare. MEMG runs a chain of at least 12 hospitals in South India both in the tertiary- and secondary-care segments, with Manipal Hospital, Bangalore, being the flagship. It has two more hospitals in Bangalore, besides some primary care facilities. M&A action has been seeing a spurt in South India, with a spate of deals involving strategic players as well as private equity funds. Fortis recently snapped up Malar Hospital in Chennai; IVEN Medicare, part of ICICI Ventures, invested over Rs 100 crore in Mysore-based Vikram Hospitals and India Value Fund infused around Rs 200 crore into Kochi-based DM Healthcare, which plans to set up a network of hospitals nationally.