Apollo HealthCo Ltd Gains Rs 2,475 Cr Boost from Advent for Expansion

Apollo HealthCo Ltd, a subsidiary of the renowned Apollo Hospitals Enterprise Ltd, has recently announced a significant financial move by entering into an agreement with the global private equity firm Advent International. This strategic partnership involves a substantial investment of Rs 2,475 crore into Apollo HealthCo Ltd, also known as Apollo 24/7 or AHL. This collaboration marks a pivotal moment for both entities involved.

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Under the terms of the agreement, AHL will see a complete integration of its wholesale pharmaceuticals distributor firm, Keimed Pvt Ltd, with Advent International over an anticipated period of 24 to 30 months. This merger is set to create a joint entity where Advent International will acquire a 12.1 per cent stake. The valuation of the combined entity is pegged at Rs 22,481 crore, with Apollo HealthCo and Keimed valued at Rs 14,478 crore and Rs 8,003 crore respectively.

Following the merger, Keimed Pvt Ltd's shareholders will possess a 25.7 per cent stake in the joint entity, while Apollo Hospitals Enterprise Ltd will maintain its position as the majority shareholder. This move is seen as a significant step towards consolidating Apollo's presence in the healthcare sector.

Dr Prathap C Reddy, Chairman of Apollo Hospitals Group, emphasized the mission of delivering high-quality healthcare at an affordable cost with reliability and trust. He highlighted that Apollo 24/7 has successfully reached over 33 million Indians, demonstrating the brand's commitment and reach within a short span. The investment by Advent International and the merger with Keimed is expected to further solidify Apollo's position as a leading retail health company.

Suneeta Reddy, Managing Director of Apollo Hospitals Enterprise Ltd, expressed satisfaction over the growth and incubation of Apollo 24/7. She acknowledged Advent's recognition of the brand's value and potential. The merger with Keimed is anticipated to be a crucial step in integrating a comprehensive supply chain, aiming to deliver Rs 25,000 crore of revenue in three years with an EBITDA margin of 7-8 percent.

Shweta Jalan, Advent India Head and Managing Partner, shared her enthusiasm for the investment, highlighting Advent International's commitment to India's rapidly growing healthcare sector. She expressed eagerness to partner with the Apollo franchise and leverage their deep industry understanding to accelerate growth.

The financial advisory role for this transaction was served by Veda Corporate Advisors. Legal advisories were provided by Shardul Amarchand Mangaldas and Company for Apollo HealthCo and AZB and Partners for Apollo Hospitals Enterprise Ltd. Cyril Amarchand Mangaldas acted as legal advisor to Advent International.

This partnership between Apollo HealthCo Ltd and Advent International not only signifies a major financial investment but also underscores a shared vision for enhancing healthcare accessibility and quality in India. With both entities bringing their expertise and resources to the table, this collaboration is poised to make significant strides in India's healthcare landscape.