Apollo Hospitals’ arm to raise ₹2,475 crore from Advent International

Apollo HealthCo, a subsidiary of Apollo Hospitals Enterprise Ltd, has signed a binding agreement with private equity firm Advent International to raise ₹2,475 crore, the company said in a release on Friday.

Advent will invest in compulsory convertible instruments over two tranches to acquire 12.1% in Apollo HealthCo, valuing the entity at ₹22,481 crore. 

Parent Apollo Hospitals Enterprise will continue to own a 59.2% stake in Apollo Healthco.

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The transaction will also see the merger of two units under Apollo Healthco – its wholesale pharma distribution unit Keimed Pvt Ltd and online healthcare business Apollo 24/7. The merger is subject to further corporate approvals to be obtained at the relevant time, the company said. 

Post the merger, Keimed shareholders would hold a maximum of 25.7% stake in the combined entity. 

The merger of Keimed is a significant step in the integration of the comprehensive supply chain, said Suneeta Reddy, managing director, Apollo Hospitals Enterprise. “The combined entity will deliver ₹25,000 Crores of revenue in 3 years with 7-8% EBITDA,” she added.

Veda Corporate Advisors was the financial adviser to the transaction.

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The pharmacy distribution segment, which was previously under Apollo Healthcare Enterprises' hospital business, was transferred to Apollo HealthCo in 2022. 

Launched in 2020, Apollo HealthCo now encompasses offline pharmacy distribution, online pharmacy distribution, and the digital healthcare platform Apollo 24/7. 

Apollo 24/7 claims to have a user base of more than 33 million.

Apollo HealthCo has a distribution network of over 6,000 pharmacies across 1,100 cities.

Advent International is a global private equity firm focusing on investments in sectors such as business and financial services, health care, industrial, retail, consumer, and leisure, and technology. 

The investment firm has completed over 17 investments in India, including 12 current investments and five exits, investing about $5.8 billion since 2009, when it opened its first office in the country. Its other current healthcare investments include Cohance Life Sciences, Suven Pharma and Bharat Serums & Vaccines. 

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