Advent shall invest in compulsory convertible instruments over 2 tranches to secure 12.1 per cent stake in the merged entity, by valuing the combined entity at an enterprise value of Rs 22,481 crores
Apollo HealthCo, a subsidiary of Apollo Hospitals Enterprise has entered into a binding agreement to raise equity capital of Rs 2,475 crore from Advent International (Advent), an experienced global private equity investors. In addition, Apollo 24|7 has entered into a framework agreement to integrate 100 per cent of Keimed (Keimed), India’s leading wholesale pharma distributor, in a phased manner over the next 24-30 months.
Advent shall invest in compulsory convertible instruments over 2 tranches to secure 12.1 per cent stake in the merged entity, by valuing the combined entity at an enterprise value of Rs 22,481 crores. Apollo 24|7 is valued at an enterprise value of Rs 14,478 crores. Keimed is valued at an enterprise value of Rs 8,003 crores and under merger, Keimed shareholders would hold a maximum of 25.7 per cent stake in the combined entity, while AHEL would continue to remain the largest controlling shareholder with at least 59.2 per cent stake. The merger is subject to further corporate approvals to be obtained at the relevant time.
Dr Prathap C Reddy, Chairman, Apollo Hospitals Group, said “ With Advent’s investment and the merger of Keimed, the combined entity will be one of the country’s leading retail health companies. This has been made possible by the efforts of the entire Apollo family, including strategic direction on the clinical work from Preetha Reddy and digital expertise from Sangita Reddy.”
Shobana Kamineni, Executive Vice Chairperson, Apollo Hospitals Enterprise said, “The size of the merged supply chain will allow 1.4 billion Indians access to genuine medicines within 24 minutes to 24 hours, 7 days a week! The platform will continue to strengthen and evolve to deliver market-leading and curated omni-channel health offerings, and make high-quality care accessible to all.”
Suneeta Reddy, MD, Apollo Hospitals Enterprise said, “At Apollo, we believe in putting the consumer at the heart of everything we do. With this belief, we have incubated and grown Apollo HealthCo, and are pleased that a marquee investor like Advent has recognised its inherent value and potential. The merger of Keimed is a significant step in the integration of the comprehensive supply chain. The combined entity will deliver Rs 25,000 crores of revenue in three years with 7-8 per cent EBITDA. This deal brings together a formidable partnership of capabilities and strengths, to deliver exponential value for AHEL and its shareholders.”.
Shweta Jalan, Managing Partner and Head, Advent India, commented, “This investment demonstrates Advent’s commitment to investing in the fast-growing healthcare sector in India, backing high-quality market leading players and working creatively with promoter-founders to drive value creation for all stakeholders. We can’t wait to partner with the Apollo franchise, a household brand, built with 40+ years of hard work by the Reddy family. Leveraging our deep understanding of the industry in India and globally, we are looking forward to helping accelerate this journey.”
Pankaj Patwari, MDanaging Director, Advent India, said, “The combination will bring differential scale, reach and capabilities that will be second to none in India and globally, and will help set up the platform to scale rapidly. We are excited to be bringing the best of Advent to support Apollo’s vision of ‘Touching a Billion Lives’.”
Veda Corporate Advisors were the exclusive financial advisors to the transactions. Shardul Amarchand Mangaldas & Co were the legal advisors to Apollo 24|7, AZB & Partners were legal advisors to AHEL and Cyril Amarchand Mangaldas were the legal advisors to Advent for the transactions.
