Aster DM Healthcare Limited and Quality Care India Limited (QCIL), backed by Blackstone and TPG signed definitive agreements for a merger on November 29. The merged listed entity will be named Aster DM Quality Care Limited.
Aster DM Quality Care Limited will have a combined portfolio of four leading brands: Aster DM, CARE Hospitals, KIMSHEALTH and Evercare. The combined entity will have a of network of 38 hospitals and 10,150+ beds spread across 27 cities making it one of the top 3 hospital chains in India.
According to disclosure to the exchanges, Aster is valued at a multiple of 36.6x on FY24 adjusted post IND AS EV/EBITDA. In comparison, QCIL is valued at a multiple of 25.2x based on FY24 adjusted post IND AS EV/ EBITDA. Based on the swap ratio recommended in the valuation report, the resultant shareholding of the merged entity will be 24 percent and 30.7 percent held by Aster promoters and Blackstone, respectively, while the balance 45.3 percent will be held by public and other shareholders.
Ahead of this merger, Aster shall purchase 5 percent stake in QCIL from Blackstone and TPG in consideration of primary share issuance by Aster for 3.6 percent stake (Initial Share Acquisition). Post the Initial Share Acquisition, QCIL will be merged into Aster by way of a scheme of amalgamation, as per the disclosure.
Azad Moopen, Founder and Chairman of Aster DM Healthcare, said: “The new combined entity ‘Aster DM Quality Care Ltd.’ is poised to become one of the largest healthcare players in the industry, setting new benchmarks in patient-centric care, innovation, and accessibility. Aster with almost four decades of leadership in GCC and India continues to be one of the biggest healthcare leaders in both the regions. The Moopen family who has been instrumental in managing Aster’s India and GCC businesses will also lead the new merged entity. Thus, by combining the strengths of two pioneers, we are not only expanding our footprint but also creating a transformative force capable of reshaping the healthcare landscape.”
The transaction is subject to shareholder & regulatory approvals, and other customary conditions to closing.
Aster expects the merger transaction to close by Q3 FY26. The ratio for the Initial Share Acquisition is the same as proposed for the merger.
Amit Dixit, Head of Asia for Blackstone Private Equity, said, “We are committed to creating one of India’s leading platforms in the healthcare sector. It is in our DNA to be a builder of businesses – using our scale, operational expertise, and global life sciences insights, we will help grow the platform, expand its footprint, and develop it into a world-class healthcare institution. We are excited to partner with the Moopen family which shares our values and strong governance standards. We believe Varun Khanna is a terrific leader and can help build the combined entity.”
Subject to necessary approvals, (i) Aster Promoters and Blackstone will hold equal representation on the board and jointly oversee the Merged Entity; (ii) Azad Moopen will continue as the Executive Chairman of the merged entity; (iii) Varun Khanna and Sunil Kumar will be promoted to the position of MD & Group Chief Executive Officer and Group Chief Financial Officer of the merged entity, respectively.
Varun Khanna, Group Managing Director of Quality Care, said, “This merger demonstrates our aligned cultures and value systems, and furthers our commitment to address bed shortage in India’s underserved regions. The teams at Aster and Quality Care have established a strong legacy of positively impacting patients’ lives and meeting the evolving needs of communities. I look forward to leading this platform into a new era focused on healthcare excellence and serving the best interests of the patients.”
Moelis & Company and Advay Capital acted as financial advisors, with Kotak Investment Banking as corporate advisor and Cyril Amarchand Mangaldas as legal counsel to Aster. Blackstone and TPG, on behalf of QCIL, was advised by NovaaOne Capital as their financial advisor with Trilegal and JSA acting as legal counsel.
PwC recommended the swap ratio as an independent registered valuer and ICICI Securities provided the fairness opinion on the swap ratio.
Aster DM Healthcare Limited is one of the largest & fastest growing integrated healthcare service providers operating in India with a strong presence across primary, secondary, tertiary, and quaternary healthcare.
QCIL beginning in 1997, has grown into a leading multi-specialty healthcare provider. QCIL’s healthcare troika includes CARE Hospitals, KIMSHEALTH and Evercare. With a network of 26 healthcare centers operating over 5,150+ beds across 14 cities, QCIL is one of the largest hospital networks in India focused on emerging markets.
