Private Equity Firm KKR Acquires Controlling Stake in Healthcare Global for $400M
In a significant move that is poised to reshape the landscape of India’s healthcare sector, private equity giant KKR has announced its acquisition of a controlling stake in Healthcare Global Enterprises (HCG) for a staggering $400 million. The deal, facilitated through KKR’s Asia Fund IV, marks a strategic investment by the firm to bolster medical infrastructure and enhance critical oncology services in the country.
HCG, a prominent operator of oncology hospitals with 25 medical care centers spread across 19 cities, has emerged as a key player in the healthcare industry. The acquisition will see KKR initially purchasing up to 54% stake in HCG from CVC Asia V at ₹445 per share, paving the way for an open offer to acquire additional shares from public shareholders. By the conclusion of the transaction, KKR is expected to hold a substantial 54-77% stake in HCG, solidifying its position as a majority shareholder.
The transaction, anticipated to be finalized by the third quarter of 2025, has already generated a buzz in the market. HCG shares closed at ₹500 on the Bombay Stock Exchange (BSE) on Friday, reflecting strong investor confidence in the company’s growth prospects. The stock had reached a 52-week high of ₹563.15 earlier in February, underscoring HCG’s robust performance and market appeal.
New Leadership and Strategic Vision
Founding father of HCG, BS Ajaikumar, is slated to transition into the role of non-executive chairman following KKR’s acquisition. A visionary leader known for his commitment to clinical excellence and cutting-edge research in oncology care, Ajaikumar will spearhead HCG’s clinical, academic, and research and development initiatives. His strategic vision, coupled with KKR’s financial firepower, is expected to usher in a new era of growth and innovation for HCG.
In a statement, Ajaikumar lauded CVC Asia V for steering HCG to a position of strength, paving the way for KKR’s entry as the majority shareholder. Emphasizing the importance of a multidisciplinary approach to cancer care and research and development, Ajaikumar expressed his enthusiasm for the transformative journey ahead. With a network of 25 medical care centers equipped with 2,500 beds, 100 operating theaters, and 40 linear accelerator machines, HCG is poised to expand its footprint and deliver high-quality healthcare services to a broader patient base.
KKR’s Strategic Focus on Healthcare
Akshay Tanna, Partner, and Head of India Private Equity at KKR, highlighted the firm’s enduring commitment to the healthcare sector in India. By investing in HCG, KKR aims to fortify medical infrastructure and enhance the delivery of critical oncology services to a larger patient population. The acquisition of HCG aligns with KKR’s broader strategy of investing in healthcare companies with substantial growth potential and a track record of clinical excellence.
KKR’s foray into the healthcare sector has been characterized by strategic investments in leading healthcare institutions across India. From regional multi-specialty hospitals like Baby Memorial Hospital to medical devices companies like Healthium, KKR has consistently demonstrated its ability to identify and nurture high-potential healthcare ventures. With a diversified portfolio that includes Max Healthcare, JB Chemicals and Pharmaceuticals, and Gland Pharma, KKR’s investment in HCG underscores its confidence in the long-term growth prospects of India’s healthcare industry.
Collaborative Value Creation
CVC Asia V, the outgoing stakeholder in HCG, commended its India team for orchestrating a transformational value creation program that enhanced HCG’s operational efficiency and patient care standards. Since 2020, CVC Asia V has collaborated closely with HCG to drive revenue growth, improve key performance indicators, facilitate acquisitions, and spearhead digital transformation initiatives. The synergistic partnership between CVC Asia V and HCG has not only weathered the challenges posed by the COVID-19 pandemic but also positioned the company for sustained growth and innovation in the years to come.
In conclusion, KKR’s acquisition of a controlling stake in HCG heralds a new chapter in India’s healthcare narrative, characterized by innovation, collaboration, and a steadfast commitment to patient-centric care. As HCG embarks on an ambitious growth trajectory under the stewardship of KKR and BS Ajaikumar, the stage is set for transformative advancements in oncology care, research, and medical infrastructure. With the combined expertise of KKR, HCG, and CVC Asia V, the future of healthcare in India shines bright with promise and possibility.
