Advent International to invest Rs 2,475 crore in Apollo HealthCo

Apollo HealthCo Ltd (AHL), a subsidiary of Apollo Hospitals Enterprise (AHEL), has entered into a significant agreement to raise equity capital of Rs 2,475 crore from Advent International, one of the world's largest private equity players.

The strategic move includes the merger of its wholesale pharma distribution unit, Keimed Pvt Ltd, with its online healthcare business, Apollo 24|7.

This phased merger, which will take place over the next 24-30 months, is expected to create a leading retail health company with projected revenues of Rs 25,000 crore within three years and an EBITDA margin of 7-8%.

Leadership comments

Dr. Prathap C Reddy, Chairman of Apollo Hospitals Group, emphasized the transformative impact of this partnership, stating, "Our mission has been to deliver high-quality healthcare to all, at an affordable cost, and with a high degree of reliability and trust. Apollo 24|7 has delivered on this promise and reached over 33 million Indians in a short span of time."

He said that Advent’s investment and the merger of Keimed will make the combined entity one of the country’s leading retail health companies.

Kamineni highlights operational benefits

Shobana Kamineni, Executive Vice-Chairperson of Apollo Hospitals, highlighted the operational benefits, "Leveraging the Apollo brand, a multi-dimensional team and state-of-the-art tech and products, Apollo 24|7 has scaled faster than its peers in a third of the time. Today marks a new milestone and gives us the ability to double down on what we do best. The size of the merged supply chain will allow 1.4 billion Indians access to genuine medicines within 24 minutes to 24 hours, seven days a week!"

Suneeta Reddy, Managing Director of Apollo Hospitals, also noted the financial and strategic benefits, "The merger of Keimed is a significant step in the integration of the comprehensive supply chain. This deal brings together a formidable partnership of capabilities and strengths and will deliver exponential value for AHEL and its shareholders."

Advent to invest in compulsory convertible instruments

Advent will invest in compulsory convertible instruments over two tranches to secure a 12.1% stake in the merged entity, valuing it at an enterprise value of Rs 22,481 crore.

"This investment demonstrates Advent’s commitment to investing in the fast-growing healthcare sector in India, backing high-quality market-leading players and working creatively with promoter-founders to drive value creation for all stakeholders. We can’t wait to partner with the Apollo franchise, a household brand, built with over 40 years of hard work by the Reddy family," said Shweta Jalan, Managing Partner and Head of Advent India.