Emirates Investment Authority Invests in Aster’s GCC Business

Posted on 11/30/2023

Aster DM Healthcare (Aster), one of the largest and fastest-growing integrated healthcare providers in GCC and India, received board approvals from its subsidiary Affinity Holdings Private Limited and approval from its Board of Directors to separate the India and GCC businesses into two distinct and standalone entities. Under the separation plan, Affinity has entered into a definitive agreement with a consortium of investors led by Fajr Capital, a sovereign-owned private equity firm headquartered in the UAE, to invest in Aster’s GCC business. The Fajr Capital – led consortium also includes Emirates Investment Authority, Al Dhow Holding Company (the investment arm of AlSayer Group), Hana Investment Company (a subsidiary of Olayan Financing Company) and Wafra International Investment Company. The board of Affinity and its representatives who negotiated the transaction formed a positive view of the favourable valuation and other terms offered by the Fajr Capital-led consortium.

This deal was revealed on November 28, 2023.

Aster DM Healthcare was established by Dr Azad Moopen in 1987 as a single clinic in Dubai, UAE. The company has since grown to become a major private healthcare provider, offering a full spectrum of primary, secondary, tertiary and quaternary healthcare services that cater to the diverse needs of its patients. In India, Aster has a substantial and growing network in 5 South Indian states through its 19 hospitals, 13 clinics, 226 pharmacies and 251 patient experience centers. Meanwhile, in the Gulf, Aster has developed a strong reputation and presence, with 15 hospitals, 118 clinics and 276 pharmacies across the UAE, Saudi Arabia, Qatar, Oman, Bahrain, and Jordan.

Upon completion, the separation of the India and GCC businesses will establish two distinct regional healthcare champions that will benefit from the strategic and financial flexibility to focus on growing market demand and the priorities of patients. Both the India and GCC entities will be operated by separate dedicated management teams and will also benefit from a dedicated investor base that will aid future growth in the Indian and GCC markets respectively, both of which hold significant growth potential.

EY and PwC provided independent valuation advice and ICICI Securities provided fairness opinion for the valuation guidance. Baker & McKenzie LLP was Affinity’s lawyers on the transaction. Cyril Amarchand Mangaldas was Aster’s lawyer on the transaction. AZB & Partners were the advisors to independent directors. Moelis & Company and Credit Suisse acted as the sell-side advisors. HSBC Bank Middle East Ltd., Allen & Overy LLP and PwC acted on behalf of the Fajr Capital consortium.

The transaction is subject to shareholder approval in India, regulatory compliances and other customary conditions to closing. The Company expects the transaction to close by March 2024.

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