CVC Capital revises offer to acquire cancer care chain HCG for $138m

US-based private equity fund CVC Capital has entered into an agreement to acquire Indian cancer care chain Healthcare Global Enterprises (HCG) at a revised price of Rs 130 per share or about $138 million (Rs 1,049 crore). In May, CVC Capital had announced its plan to acquire about 36.48 per cent stake in HCG through a preferential allotment of shares at a price of Rs 100 per share. As per the latest agreement, CVC Capital’s Singapore-based investment arm Aceso Company Pte Ltd will subscribe to 2.95 crore equity shares and 1.85 crore warrants (convertible into an equal number of equity shares) of the company, in tranches, at Rs130 a share, aggregating to Rs625 crore, HGE said in a disclosure to the stock exchanges Thursday. The investor will also make an open offer for the acquisition of up to 3.36 crore fully paid-up equity shares, representing 26% stake from the public shareholders of the company at a price of Rs 130 per equity share, aggregating to total consideration of Rs 424 crore in cash. The total shareholding of the acquirer in the target company, together with the equity shares and warrants to be so exercised will be 3.657 crore equity shares, constituting 29.16 per cent of the target company’s expanded voting share capital. The acquirer has also agreed not to exercise the balance 1.15 crore warrants until the expiry of 15 business days from the completion of the open offer, the disclosure added. Currently, HCG’s promoters – BS Ajai Kumar and his family — hold about 23 per cent stake in the company. V-Sciences Investments, a wholly-owned subsidiary of Temasek Life Sciences, holds 9.38 per cent stake in HGE while Indgrowth Capital owns about 1.2 per cent. Founded in 1989, HCG has a network of about 20 comprehensive cancer centers spread across India, according to its website. In 2013, it entered into the fertility treatment business through acquisition of BACC Healthcare and has eight fertility centres operated under the Milann brand.

Source: Deal Street Asia

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