Columbia Asia Hospitals—a $2-billion chain—is up for grabs. With 29 medical facilities and 2,600 beds, that’s Columbia Asia’s total value across Asian countries like Malaysia, Vietnam, Indonesia, and of course, India. Unsurprisingly, a large number of international private equity firms (PEs) and other buyers want in.
Columbia Asia entered India in 2003 to run community hospitals. Its premise was access—people should have medical care within 10 kilometres of their homes for 70-80% of their healthcare needs. The chain’s dozen hospitals in India, however, are mid-sized, with fewer than 1,200 beds in all, and yet, the chance to buy it is being touted as a ‘once-in-a-decade’ opportunity for potential suitors.
While not confirming the outright sale of the chain, Nathan McLemore, managing director of Columbia Pacific Management, said in an email that the hospital group plans to grow by adding two new hospitals per year, with an aim for 1,100 more beds in five years. To do this, the Columbia Pacific has launched a process to raise additional capital to fund Columbia Asia’s next phase of growth. This, he says, has received strong interest from investors, adding that the capital raise is proceeding as planned. Columbia Pacific is the holding company of Columbia Asia.
Sources The Ken has spoken to, though, indicate this isn’t a simple fund raise. People close to the matter say the chain will sell all properties or nothing. “They are very open about it,” says an interested buyer from Bengaluru, who requested anonymity because his hospital group is a direct competitor. Columbia Asia, however, did not confirm the exact stake up for sale.
Columbia Asia is a desirable property because of its great locations and quality of service. In India, the chain’s hospitals occupy prime real estate in some of the most populous areas in metros. McLemore said there is substantial interest from investors as theirs is the only hospital company operating across four highly desirable markets with a single brand but that it would be premature for him to comment about valuation at this time.
But in a country rife with major private hospital chains such as Apollo, Fortis, Narayana Health, Medanta and Manipal providing specialised tertiary care, it’s hard to survive. Despite this, Columbia Asia tried to move up the value chain with secondary care.
Except, the Indian hospital business is not simple.
A. There is almost too much competition and not much to gain for a chain that doesn’t focus on super-specialty care. B. The takeover game is in full swing even amidst the big names mentioned above—Manipal Hospitals is in the process of closing its acquisition of New Delhi-based Medanta for Rs 5,800 crore ($833 million). Against this backdrop, the sale of Columbia Asia is no shocker.
That Columbia Asia is consolidating assets to make the process smoother is apparent from its corporate filings.
