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Fortis continues global push

by Ben Fidler | Published November 2, 2011 at 2:58 PM

Fortis Healthcare (India) Ltd. finally has its pan-Asian footprint, and it has its own majority owners to thank for it.

Fortis announced Tuesday, Nov. 1, that it has agreed to acquire Singapore-based Fortis Healthcare International Pte Ltd., an entity run by the buyer's founding Singh family, for $665 million.

The deal is expected to close by mid-December.

Fortis International was established in 2010 by brothers Malvinder Mohan Singh and Shivinder Mohan Singh, Fortis' majority shareholders and founders. The Singhs set the operation up after Fortis' failed attempt to acquire Singapore-based Parkway Holdings Ltd. in a bid to create a pan-Asian healthcare powerhouse.

Fortis had made a concerted effort to acquire Parkway, Asia's largest hospital operator, in 2010. First, Fortis paid $685.3 million to buy a 23.9% stake in the entity from U.S. buyout firm TPG Capital in March 2010. It then took management control and boosted its stake, setting off a four-month bidding war for control of the business with then-minority shareholder and Malaysian sovereign wealth fund Khazanah Nasional Bhd. The struggle ended when Khazanah won control in July 2010 with a bid that valued the company at $3.3 billion.

Fortis bowed out and pledged at the time to find an alternative path to expansion in the region. The plan led the Singh brothers to create Fortis International (originally known as Fortis Global Healthcare Holdings Pte Ltd.), a vehicle to make healthcare acquisitions. The Singhs created the entity to become a "premiere pan-Asian integrated healthcare provider," according to Fortis' website, and it quickly began acquiring and investing in entities across the globe, among them Hong-Kong based primary care network Quality Healthcare Asia Ltd., Australia dental care network Dental Corp. and Vietnamese private healthcare provider Hoan My Medical Corp. The result is a company with a presence in Hong Kong, Canada, Mauritius, Australia, New Zealand, Singapore, Sri Lanka, Dubai and Vietnam.

Following the moves, Fortis set its sights on consolidating the two entities. On Sept. 19, it announced that it planned to buy out Fortis International, but it didn't reach a deal until Tuesday. Independent valuation agency Haribhakti & Co., an affiliate of BDO International, valued the company at $695.7 million, but the Singhs agreed to sell their investment to Fortis for roughly $30 million less.

Fortis, which began as a single hospital in India in 2001, said the deal gives it a "dominant position" in the evolving Asian healthcare market as well as the ability to compete with other healthcare groups expanding in the region.

The combined company will have more than 74 hospitals, 12,000 beds, 580 primary care centers, 191 day care specialty centers, 190 diagnostic centers and more than 23,000 employees.

"This is a transformational transaction for Fortis and a key step towards fulfilling our vision of creating the world's leading integrated healthcare provider," Malvinder Mohan Singh said in a statement.

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