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The transaction comprises the divestment of the business operations pertaining to Fortis Malar Hospital residing in the listed subsidiary of the company - Fortis Malar Hospitals Limited in which Fortis Healthcare owns a 62.7 percent equity stake, its OPD and radiology business operations related to the Fortis Malar Hospital and multiple related land parcel adjacent to the property.
The transaction will be an all-cash deal and is estimated to be consummated by end of January 2024; subject to certain conditions precedent and closing conditions as stipulated in the definitive agreements including the approvals from shareholders of both Fortis Healthcare and Fortis Malar Hospitals Limited respectively.
The Fortis Malar Hospital is approximately a 140 bed facility and has been facing certain legacy issues.
The proposed acquisition is in line with MGM Healthcare’s strategy to further expand its presence in Chennai, in addition to its two quaternary care hospitals with a combined bed capacity of approximately 600 beds at present and another 450 bed greenfield hospital under development.
Dr. Ashutosh Raghuvanshi, MD & CEO, Fortis Healthcare, said, “The proposed divestment of the Fortis Malar facility underpins our focus on optimizing the current portfolio of our hospital assets with a view to prioritize our growth and expansion in other key markets and re-allocate capital judiciously. This is our second under performing asset divestment in the last 2 quarters and emphasizes our resolve to improve our overall profitability and margins in the hospital segment.”
Dr. Prashanth Rajagopalan, MD, MGM Healthcare, said, “As a part of our long-term growth and expansion plans, MGM Healthcare has been investing in both greenfield and existing facilities to enhance care and clinical offerings for a broader patient population. With this acquisition, we would bring our total bed count in Chennai to approximately 800 beds.”
Fortis Healthcare is a leading integrated healthcare delivery service provider in India. The healthcare verticals of the company primarily comprise hospitals, diagnostics and day care specialty facilities. Currently, the company operates 27 healthcare facilities (including JVs and O&M facilities). The company's network comprises approximately 4,500 operational beds.
The company’s consolidated net profit decreased 15% to Rs 173.72 crore despite of 10.1% increase in net sales to Rs 1,769.95 crore in Q2 FY24 over Q2 FY23.
The scrip rose 0.31% end at Rs 366.30 on Friday, 24 November 2023.
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