Aster DM Healthcare and Blackstone-backed Quality Care India Ltd. (QCIL) have unveiled plans to merge through a share swap agreement, creating one of India’s top three hospital chains. The combined entity, to be named Aster DM Quality Care Ltd., will operate 38 hospitals with a total capacity of over 10,150 beds across 27 cities.
As reported by thehindubusinessline, the merger will be finalized within 15 days of receiving approvals from shareholders and the Competition Commission of India (CCI), whichever comes later.
Significant Scale and Revenue Growth
According to Alisha Moopen, Deputy Managing Director of Aster DM Healthcare, the merger will significantly enhance operational scale, a crucial factor in the capital-intensive healthcare sector. “Scale plays a critical role in optimising Capex, material costs, and manpower, improving overall performance,” she said in a statement to BusinessLine.
The merged entity is projected to achieve total revenue of ₹7,300 crore, with an estimated EBITDA of ₹1,400 crore, reflecting a robust margin of 19%.
Share Swap Agreement
As part of the agreement, Aster DM will issue 1.86 crore shares in exchange for 1.9 crore shares of QCIL, currently held by Blackstone entities BCP Asia II TopCo IV Pte. Ltd. and Centella Mauritius Holdings Ltd. Post-merger, Aster DM shareholders will hold 57.3% of the combined entity, while QCIL shareholders will own the remaining 42.7%.
The merged entity will be jointly controlled by Aster DM promoters and Blackstone, holding stakes of 24% and 30.7%, respectively.
Expansion and Synergies
The new entity plans to add around 3,500 beds through greenfield and brownfield projects between FY24 and FY27.