Blackstone buys CARE, KIMS Health in $1 bn deal to enter India’s healthcare sector

US-based private equity firm Blackstone Group has acquired a 72.5% stake in Quality Care India Ltd (QCIL), which operates CARE Hospitals, making its entry into India’s healthcare services sector.

CARE Hospitals, in turn, has signed a definitive deal to buy an about 80% stake in KIMS Health, a Kerala-based hospital network specializing in quaternary care, which involves advanced, highly specialized medical treatments that are not commonly available

Equity firm True North will sell its entire stake in KIMS Health to Blackstone as part of the deal terms.

The deal, whose financial details were not disclosed, is part of an agreement with TPG’s Evercare Health Fund, which will retain a significant minority stake in the combined platform. 

While QCIL is valued at ₹6,600 crore ($800 million), the valuation of KIMS Health is estimated at ₹3,300 crore ($400 million). 

The combined deals are estimated to be around $1 billion, Business Standard reported. 

Blackstone said the addition of KIMS Health to the Care Hospitals network creates one of India’s largest hospital platforms, with 23 facilities across 11 cities. 

The deal will put the combined entity into a leadership position in under-penetrated, emerging cities that have strong potential for growth. The combined platform will have more than 4,000 beds, the US-headquartered private equity firm said. 

The combined platform will deliver advanced comprehensive care in more than 30 clinical specialties, including cardiac sciences, oncology, neurosciences, renal sciences, orthopedics, gastroenterology, and integrated organ transplant. 

Ganesh Mani, managing director at Blackstone Private Equity, said: “We are pleased to make Blackstone’s first investment in India’s healthcare services sector and partner with TPG to create one of the largest healthcare platforms in India. CARE Hospitals and KIMS Health are trusted brands in the Indian healthcare space with a reputation of prioritizing patients and have a track record of excellence in medical ethics and clinical outcomes. We aim to build a patient-centric hospital platform focused on high clinical care quality and top-notch service.”

Mani said the firm seeks to grow the platform organically and through acquisitions. “Life sciences is a key investment theme for Blackstone and we plan to bring in our global scale and operating expertise. We plan to invest in world-class physical and medical infrastructure, enhance the companies’ digital and technological capabilities, add higher-end quaternary care specialties, and cultivate a clinician and employee culture-focused organization,” he added. 

Ankur Thadani, partner at TPG, said they were excited about partnering with Blackstone to continue “our efforts and journey in building CARE Hospitals Group into a leading, patient-centric healthcare delivery network across India and South Asia, focused on delivering clinical excellence.” 

“We believe there is significant potential in creating a market-leading platform through both organic and partnership-driven consolidation efforts, which is evidenced in our proposed association with KIMS Health,” Thadani said. 

KIMS Health founder Dr. M.I. Sahadulla, who is currently chairman and managing director, will continue in his role, Blackstone said. 

“Over the past two decades, our institutions have played an important role in providing accessible healthcare with quality, patient safety, and ethical practice for patients in India and abroad. We believe that this partnership with globally renowned players, such as Blackstone and TPG will strengthen our capabilities and help the business enter its next phase of growth as part of a leading healthcare platform. We at KIMS Health thank all our minority investors for their trust over the last 21 years and are proud to have created a successful exit event for them,” Sahadulla said.