Aster DM, Blackstone’s Quality Care announce merger

The boards of Aster DM Healthcare Ltd and Blackstone-owned hospital platform Quality Care India Ltd (QCIL) have approved a merger to form India’s third-largest hospital chain.

The combined entity, named Aster DM Quality Care Ltd, will operate 38 hospitals with over 10,150 beds across 27 cities under four brands: Aster DM, CARE Hospitals, KIMSHEALTH, and Evercare.

Aster shareholders will hold a 57.3% stake in the merged entity, with QCIL shareholders owning 42.7%. Following the merger, Aster and its promoters will control 24%, Blackstone 30.7%, and the remaining 45.3% will be held by the public and other stakeholders.

Dr Azad Moopen will continue in his role as executive chairman and will oversee Aster DM Quality Care Ltd. Varun Khanna, group managing director (MD) of Quality Care, will be the MD and group chief executive officer of the merged entity.

“The Moopen family who has been instrumental in managing Aster’s India and GCC businesses will also lead the new merged entity,” Aster DM Healthcare founder and chairman Moopen said.

“The integration of Aster and Quality Care’s extensive network and deep operational expertise with backing from Blackstone and TPG–among the most respected private equity firms will enhance our ability to deliver world-class healthcare services, drive innovation, and improve patient outcomes,” Moopen said, adding: “The merger will also provide our medical professionals with an opportunity to cater to higher and diverse patient inflows.”

“We are excited to partner with the Moopen family which shares our values and strong governance standards,” Amit Dixit, head of Asia for Blackstone Private Equity, said.

“The accelerated growth of Aster over the last 10 years in India showcases our deep clinical leadership and our ability to respond and cater to the market demand ahead of the curve,” Alisha Moopen, deputy managing director of Aster DM Healthcare, said.

“Through this merger with Quality Care, backed by Blackstone and TPG, we are creating a powerful force that will elevate healthcare standards through this strategic partnership,” she added.

“Life sciences is a key investment theme for Blackstone globally. We have built a unique healthcare private equity practice in India including a transformative buy-and-build hospital chain platform at Quality Care. The partnership between Aster and Quality Care is expected to significantly benefit patients, clinicians, employees, the community, and shareholders,” Ganesh Mani, senior managing director at Blackstone Private Equity, said.

Vishal Bali, senior advisor at TPG, said: “Healthcare has long been a thematic focus for TPG globally and in India, and we are pleased to see Quality Care’s partnership with Aster to create one of India’s top 3 multi-specialty hospital chains.”

“TPG has been a long-term investor in the hospitals segment in India, and is focused on building institutions of healthcare with a foundation of continuous quality
improvement and standardized care to improve clinical outcomes and patient safety,” Bali added.

“The merger demonstrates our aligned cultures and value systems, and furthers our commitment to address bed shortage in India’s underserved regions,” Varun Khanna, group managing director of Quality Care, said.

“The teams at Aster and Quality Care have established a strong legacy of positively impacting patients’ lives and meeting the evolving needs of communities,” Khanna added.

Moelis and Co. and Advay Capital acted as financial advisors, with Kotak Investment Banking as corporate advisor and Cyril Amarchand Mangaldas as legal counsel to Aster.

Blackstone and TPG, on behalf of QCIL, was advised by NovaaOne Capital as their financial advisor with Trilegal and JSA acting as legal counsel.

PwC recommended the swap ratio as an independent registered valuer and ICICI Securities provided the fairness opinion on the swap ratio.