Aster DM Healthcare to sell Gulf business to Alpha GCC for $1.01bn. Alpha GCC will be owned by the promoter group of Aster India and funds managed by Middle East private equity firm Fajr Capital Advisors.

The move is part of its plan to separate its operations in India and the Gulf countries.

Aster DM Healthcare will offload the 65% stake held by its wholly-owned subsidiary, Affinity Holdings, in Aster DM Healthcare FZC—the holding firm of GCC businesses—to Alpha GCC Holdings. The Moopen family, which controls the Aster Group, will retain the remaining 35% stake, Aster DM Healthcare said in a stock exchange update.

Of the total $1.01bn, $903m is payable at closing, with up to $98.8m subject to certain contingent events, including an earnout payment of up to $70m, it said.

Azad Moopen will continue as the founder and chairman, overseeing both India and GCC businesses, while Alisha Moopen will be promoted as MD and Group CEO of the GCC business.

“The strategic decision to segregate the India and GCC operations was based on the rationale to establish fair value for both entities, creating two pure-play geographically-focused entities that are able to leverage the growth opportunities in their respective markets,” Azad Moopen said.

“In India, we as promoters, remain committed to our growth plans and hence had increased our stake to 42% earlier this year. Major institutional shareholders continue to remain invested, reflecting overall confidence in the Company’s India business model and go-to-market strategy spanning all segments of the healthcare space,” he added.

The current market cap of the combined India and GCC business stands at $2bn. The transaction values the GCC business at an enterprise value of $1.7bn and an equity value of $1bn.

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The separation will also offer Aster India an opportunity to potentially expand its institutional investor base to include investors who are mandated to invest in India.

The transaction is subject to regulatory compliances and shareholder approvals, and is expected to close by March 2024.

EY and PwC provided independent valuation advice and ICICI Securities provided fairness opinion for the valuation guidance. Moelis & Company and Credit Suisse acted as the sell-side advisors.

Ahead of the announcement, Aster DM Healthcare’s shares closed down 1.41% at $4.00 (Rs 332.65) on the Bombay Stock Exchange.

Source: Financial Express

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