M&As prove to be a shot in the arm for hospital expansion

Analysts say these deals significantly reduce the go-to-market time, and give instant market share and access to patients in certain geographies

- SOHINI DAS

The past few years have seen mergers and acquisitions M&A) activity in the hospital space heating up, and industry insiders feel that the trend is likely to sustain.

Both analysts and hospital operators are of the view that M&As significantly reduce the goto-market time, and give an instant market share and access to patients in certain geographies. Greenfield projects typically have a three-four-year window.

A case in point is Bengalurubased Manipal Hospitals, which has been on the lookout for acquisitions for a while. It bid for Fortis Healthcare in 2018, a deal that finally went to Malaysia’s IHH. It was also in the race to acquire Naresh Trehan’s Medanta-The Medicity. But Manipal Hospitals decided to drop plans to buy Gurugram-based Medanta-The Medicity for 35,800 crore, which was valuing Medanta at roughly 26x its Ebitda.

However, in 2020, Manipal Hospitals bought Columbia Asia for around 22,100 crore which catapulted it to become the secondlargest hospital chain in the country, after Apollo Hospitals. It did not stop there and acquired Bengalurubased Vikram Hospitals in June last year for 350 crore, and has now signed a binding agreement to acquire AMRI Hospitals from Emami Group in Kolkata for 71,500 crore. At the same time, it has started work to build a Greenfield hospital in Raipur.