MGM Healthcare to Acquire Fortis Malar Hospitals Limited in Chennai
MGM Healthcare Private Limited is set to acquire Fortis Malar Hospitals Limited, a subsidiary of Fortis Healthcare, in Chennai for Rs 128 crore. Fortis Malar Hospitals is considered to be a prominent healthcare facility at Adyar in Chennai and the only listed subsidiary of Fortis group.
Acknowledging the development Fortis Healthcare in a statement said, the transaction includes business operations pertaining to Fortis Malar Hospital, the OPD and radiology business operations to the hospital, land and building of Fortis Malar Hospital, land parcel located next to Fortis Health Management Limited and Hospitalia Eastern Private limited”s land parcel which is currently being used as a parking lot.
The sale price is Rs 128 crore (approximately USD 15.5 million) and the deal has been finalized with the signing of definitive agreements. This all-cash deal is estimated to be completed by the end of January 2024. The money raised through the sale will be used to extend the presence in certain geographic regions.Fortis Healthcare is also planning to divest its Vadapalani facility in Chennai .
To a question regarding the legacy issues pertain to Malar hospitals, the Fortis healthcare officials admitted that Fortis Malar Hospitals has been struggling with some of the issues, which have limited the company”s ability to invest in the facility and address ongoing challenges. Due to these continuing difficulties, selling the hospital business to MGM Healthcare has emerged as a practical solution.
Ashutosh Raghuvanshi, managing director & CEO, Fortis Healthcare, said, “The proposed divestment of the Fortis Malar facility underpins our focus on optimizing the current portfolio of our hospital assets to prioritize our growth and expansion in other key markets and reallocate capital judiciously. This is our second under performing asset divestment in the last two quarters and emphasizes our resolve to improve our overall profitability and margins in the hospital segment.”
Prashanth Rajagopalan, managing director, MGM Healthcare, said, “With this acquisition, we would bring our total bed count in Chennai to approximately 800. We are determined to restore and advance Malar to its original glory.”
