Life Healthcare has entered into an agreement with Radiant Life Care to dispose of its 49.7 percent stake in Max Healthcare in India. Photo: Simphiwe Mbokazi/African News Agency (ANA)

DURBAN – Life Healthcare has entered into an agreement with Radiant Life Care to dispose of its 49.7 percent stake in Max Healthcare in India. 

The group said yesterday that in terms of the agreement, Radiant will acquire the 49.7 percent stake held by Life Healthcare for 80 rupees a share (R15.77 a share), equalling R3.9 billion at hedged exchange rates before costs and taxes.

Life Healthcare chief executive Dr Shrey Viranna said the groups had entered into a share purchase agreement on December 24 last year and the deal was backed by leading global investment firm KKR.

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic manager partnerships that manage hedge funds.

“Initially Life Healthcare will use the funds to settle debt and grow South African complementary and diagnostic services while building an integrated local offering,” Viranna said.

He added that internationally, the group would also continue to pursue its aspirations to become a global player with a focus on operational efficiencies in diagnostics and growth in existing markets through selective investments. 

The group has informed its shareholders that the implementation of the transaction remains subject to several conditions, including the approval of the competition authority in India. It added that the long stop date for closure of the transaction is at the end of May. 

Life Healthcare operates in South Africa and has a hospital in Botswana. The group has an international presence through Alliance Medical Group (UK and Europe) and Scanmed SA in Poland. 

Viranna said Life Healthcare’s strategy was evolving away from delivery of acute hospital care in emerging markets towards a much deeper approach to integrated healthcare, leveraging off the diagnostics capability of Alliance Medical Group. 

“By concluding the Max Healthcare transaction it will enable this strategy and allow Life Healthcare to focus on its core operations in South Africa, the UK, Poland and Western Europe,” he said.

In the year to end September results, the group reported 12.9 percent increase in revenue to R23.5bn, with its UK subsidiary, Alliance Medical Group, reporting revenue growth of 30.8 percent to R5bn while normalised earnings before interest, tax, depreciation and amortisation (Ebitda) increased by 27.9 percent to R1.16bn.

Life Healthcare has set aside R2.6bn for the financial year 2019 for its capital expenditure programme. Its shares closed 2.47 percent higher at R26.95 on the JSE yesterday.