Ontario Teachers’ strikes maiden control deal in India; Everstone gets partial exit

 Ontario Teachers’ strikes maiden control deal in India; Everstone gets partial exit

Ontario Teachers’ Pension Plan Board said Wednesday it has signed an agreement to buy a significant majority stake in Sahyadri Hospitals Group, the largest private hospital chain in India’s Maharashtra state, from private equity firm Everstone.

Everstone, key management executives and founders will retain minority stakes in the company, Ontario Teachers’ said.

This is the Canadian pension fund’s first buyout in India, and its fourth major investment in the country over the last 12 months, said Raju Ruparelia, Senior Managing Director, Private Capital, Asia-Pacific at Ontario Teachers’.

“We believe we can leverage our significant global experience in the healthcare sector to help scale the company into a national healthcare provider in the coming years,” he said.

Ontario Teachers’ didn’t disclose financial details of the transaction.

Founded by Charudutt Apte, Sahyadri has eight hospitals with around 900 operating beds and 300 critical-care beds. The hospital chain plans to grow its capacity by over 500 beds during the next five years. With 2,000 clinicians along with 2,600 supporting staff across its network of hospitals, Sahyadri’s facilities are concentrated around the city of Pune, the second largest city in Maharashtra by population.

Everstone had acquired a controlling stake in Sahyadri Hospitals just over three years ago in a deal involving a combination of primary investment into the Pune-based company and a secondary share purchase from its investors.

Previously, IDFC Alternatives held a controlling stake in the company, having invested in the firm in 2012 by buying out the stake held by another homegrown PE firm ICICI Venture.

Ontario Teachers’ other deals in the healthcare business around the globe include Asia Pacific Healthcare Group, New Zealand’s largest pathology network; Abano Healthcare, the operator of one of the largest trans-Tasman dental groups; and Acorn Health, a US provider of applied behaviour analysis therapy for children diagnosed with autism spectrum disorder.

Earlier this year, Ontario Teachers’ said it would invest up to $175 million in KKR’s India road platform. This road platform comprises a portfolio of 12 assets, including six that are proposed to be acquired as per definitive agreements that have been signed. This includes a mix of toll and annuity roads, with a total length of 910 kilometres across 11 states, including Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu and West Bengal.

Previously, Canada Pension Plan Investment Board and OTPP bet $200 million each on Indian toll road assets. The two pension funds picked up a 25% stake each in an infrastructure investment trust (InvIT) sponsored by the state-run National Highways Authority of India (NHAI).

This InvIT owns, operates and maintains a portfolio of five toll roads in the states of Gujarat, Rajasthan, Telangana and Karnataka, spanning a total length of 390 km and a concession period of 30 years.

Ontario Teachers’, which had net assets of C$242.5 billion as of June 30, is also an anchor investor in the National Investment and Infrastructure Fund (NIIF), a quasi-sovereign fund of the Indian government.

Vivek Sinha

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