Abraaj frontrunner to buy Medall Healthcare

Mumbai:

Dubai

investor

Abraaj

has emerged frontrunner to acquire

Medall Healthcare

, one among India’s top five diagnostics chains and radiology services provider, in a deal valued at about Rs 1,600 crore, people directly familiar with the matter said. Global long-term risk investors have revved up action in the rapidly evolving diagnostics industry in Asia’s third largest economy buoyed by health insurance and improving healthcare facilities. The Chennai-based Medall has presence in over 70 centres across southern cities besides operating a slew of public-private healthcare partnerships, including a hugely successful outsourcing deal from the Andhra Pradesh government.

Abraaj is holding advanced discussions to acquire the principal shareholder

Peepul

Capital, an Indian private equity investor that owns 80% in Medall. In 2009, Peepul partnered with serial entrepreneur Raju Venkatraman to acquire Medall, which was earlier known as Precision Diagnostics.

Last year, Abraaj acquired Hyderabad-based Care Hospitals for around Rs 2,000 crore marking the first acquisition of an Indian business by a Middle East investor. “Abraaj is engaged in serious and extensive negotiations, though no exclusivity has been provided to them,” said a person who didn’t wish to be named citing confidentiality clauses. Peepul has been seeking buyers for a while and had held discussions with a consortium involving Manipal Group, Temasek and TPG in the recent past.

An Abraaj spokesperson declined to offer comments. Peepul Capital said it was in conversations with multiple suitors, including Abraaj, while calls and text messages to Medall founder director Venkatraman went unanswered. Investment bank Spark Capital is advising on the sale process.

Abraaj, managing assets worth $10 billion, invests across growth markets in Asia, Africa and Latin America. It has chased deals in healthcare and education delivery services sectors in India. Abraaj has made bets on healthcare industry in diverse markets such as Egypt, North Africa and Turkey.

Other global investors such as Carlyle, KKR and OrbiMed among others have placed bet on Indian diagnostics industry, which is projected to touch $12 billion in revenue by the end of the current decade. The country’s diagnostics sector, which garnered bulk of the revenue from pathology services, has expanded to include cardiology and neurology functions.