KKR’s Baby Memorial Hospital Acquires 60% Stake in Star Hospitals for ₹1,800 Crore, ETHealthworld
New Delhi: KKR-backed Baby Memorial Hospital has agreed to buy a controlling stake in Hyderabad-based Star Hospitals for ₹1,800 crore, according to people familiar with the development.
The deal pegs the value of Star Hospitals at ₹3,000 crore.
Baby Memorial Hospital will acquire around 60% stake in the Hyderabad hospital chain’s parent company, Unimed Healthcare, the people said.
Star Hospitals was founded by cardiologist Gopichand Mannam, a Padma Shri recipient.
KKR will infuse funds into Kozhikode-headquartered Baby Memorial Hospital to finance the acquisition.
Prior approval from the Competition Commission of India was obtained last month for the proposed acquisition.
“Closing documentation has been completed; some formalities remain,” said one of the persons, who did not wish to be identified.
ET was the first to report on November 26 last year that Baby Memorial Hospital had emerged as the front-runner to acquire Star Hospitals, outbidding Fortis Healthcare in the process.
KKR and Star Hospitals did not respond to ET’s queries regarding the development.
Second deal in under a year
The deal marks the second acquisition by Baby Memorial Hospital in less than a year, having previously acquired Kerala’s Meitra Hospitals for ₹1,200 crore.
Baby Memorial Hospital is also pursuing organic expansion through a greenfield facility, which is under construction in Chennai, and is adding two more hospitals in Kerala.
Alvarez and Marsal were the financial advisors to Star Hospitals for the deal.
consolidation play
US-headquartered global investment firm KKR acquired a controlling stake in Baby Memorial Hospital in July 2024 for about ₹2,500 crore.
The hospital’s founder family, led by KG Alexander and others, owns about 25-30% stake in the company. They remain actively involved in managing its affairs. KKR owns the remaining stake.
Since acquiring Baby Memorial Hospital, KKR has used it as a platform to pursue acquisitions in southern India. It is believed KKR would look to replicate its strategy of consolidating hospital assets to create a platform large enough to merge with others or find a suitable opportunity to take it public at some point.
It did so with its investment in northern India-based Max Healthcare in the past. It led a merger between Max Healthcare and Radiant Life Care to turn the former into a national player before exiting the investment.
Star Hospitals runs a flagship facility in Banjara Hills in Hyderabad and a second facility in Nanakramguda, the city’s financial district. It competes with the likes of AIG Hospitals and Continental Hospitals which are located in close proximity to its flagship facility. Earlier, other chains such as Apollo Hospitals and Manipal Hospitals were also eyeing acquisition of Star Hospitals.
