Apollo Hospitals Enterprise Limited (“AHEL”)
Apollo 24|7 to raise INR 2,475 Crores from Advent International; Merge Keimed with Apollo 24|7 Apollo HealthCo Limited (“Apollo 24|7” or “AHL”), a subsidiary of Apollo Hospitals Enterprise Limited (“AHEL”) has today entered into a binding agreement to raise equity capital of INR 2,475 Crores from Advent International (“Advent”), one of the world’s largest and most experienced global private equity investors. In addition, Apollo 24|7 has entered into a framework agreement to integrate 100% of Keimed Private Limited (“Keimed”), India’s leading wholesale pharma distributor, in a phased manner over the next 24-30 months.
Advent shall invest in compulsory convertible instruments over 2 tranches to secure 12.1% stake in the merged entity, by valuing the combined entity at an enterprise value of INR 22,481 Crores. Apollo 24|7 is valued at an enterprise value of Rs 14,478 Crores. Keimed is valued at an enterprise value of INR 8,003 Crores and pursuant to merger, Keimed shareholders would hold a maximum of 25.7% stake in the combined entity, while AHEL would continue to remain the largest controlling shareholder with at least 59.2% stake. The merger is subject to further corporate approvals to be obtained at the relevant time.
Keimed is a leading wholesale pharma distribution with industry leading operating metrics. The merged entity will have an industry defining business model with Pan India presence and potential to unlock significant business synergies. The merger with Keimed is estimated to be EPS accretive from Year
1.This marks a pivotal moment in Apollo 24|7’s journey, and will strengthen the company’s commitment to build and scale one of India’s largest integrated, omni-channel healthcare eco-system.The transaction is subject to conditions precedent and customary approvals.
Dr Prathap C Reddy, Chairman, Apollo Hospitals Group, said “Our mission has been to deliver high quality healthcare to all Indians, at an affordable cost, and with a high degree of reliability and trust. Apollo 24|7 has delivered on this promise and has reached over 33 million Indians in a short span of time. With Advent’s investment and the merger of Keimed, the combined entity will be one of the country’s leading retail health companies. This has been made possible by the efforts of the entire Apollo family, including strategic direction on the clinical work from Ms Preetha Reddy and digital expertise from Ms Sangita Reddy.”
Shobana Kamineni, Executive Vice Chairperson, Apollo Hospitals Enterprise Limited said, “Leveraging the Apollo brand, a multi-dimensional team and state-of-the-art tech and products, Apollo 24|7 has scaled faster than its peers in a third of the time. Today marks a new milestone and gives us the ability to double down on what we do best. The size of the merged supply chain will allow 1.4 billion Indians access to genuine medicines within 24 minutes to 24 hours, 7 days a week! The platform will continue to strengthen and evolve to deliver market-leading and curated omni-channel health offerings, and make high quality care accessible to all.” Suneeta Reddy, Managing Director, Apollo Hospitals Enterprise Limited said, “At Apollo, we believe in putting the consumer at the heart of everything we do. With this belief, we have incubated and grown Apollo HealthCo, and are pleased that a marquee investor like Advent has recognised its inherent value and potential. The merger of Keimed is a significant step in the integration of the comprehensive supply chain. The combined entity will deliver Rs 25,000 Crores of revenue in 3 years with 7-8% EBITDA. This deal brings together a formidable partnership of capabilities and strengths, to deliver exponential value for AHEL and its shareholders”.
Shweta Jalan, Managing Partner and Head of Advent India, commented, “This investment demonstrates Advent’s commitment to investing in the fast growing healthcare sector in India, backing high quality market leading players and working creatively with promoter-founders to drive value creation for all stakeholders. We can’t wait to partner with the Apollo franchise, a household brand, built with 40+ years of hard work by the Reddy family. Leveraging our deep understanding of the industry in India and globally, we are looking forward to helping accelerate this journey.”
Pankaj Patwari, Managing Director, Advent India, said, “We are delighted to be joining the entire Apollo family as we attempt to build India’s largest Omnichannel Health-tech platform. The combination will bring differential scale, reach and capabilities that will be second to none in India and globally, and will help set-up the platform to scale rapidly. We are excited to be bringing the best of Advent to support Apollo’s vision of ‘Touching a Billion Lives’.” Veda Corporate Advisors were the exclusive financial advisors to the transactions.
Shardul Amarchand Mangaldas & Co were the legal advisors to Apollo 24|7, AZB & Partners were legal advisors to AHEL and Cyril Amarchand Mangaldas were legal advisors to Advent for the transactions.
About AHEL
Apollo revolutionized healthcare when Dr Prathap C Reddy opened the first hospital in Chennai in 1983. Today Apollo is the world’s largest integrated healthcare platform with over 10,000 beds across 73 hospitals, nearly 6000 pharmacies and over 2500 clinics and diagnostic centers as well as 500+ telemedicine centers. Since its inception, Apollo has emerged as one of the world’s premier cardiac centers, having conducted over 300,000+ angioplasties and 200,000+ surgeries and the world’s largest private cancer care provider. Apollo continues to invest in research to bring the most cuttingedge technologies, equipment and treatment protocols to ensure patients have the best available care. Apollo’s 100,000 family members are dedicated to bringing you the best care and leaving the world better than we found it.
About AHL
Apollo Healthco has established India’s most comprehensive omni-channel healthcare ecosystem, integrating the Apollo group’s renowned clinical expertise and research with state-of-the-art technology. At Apollo Healthco, our mission is to deliver unparalleled service standards and a seamless continuum of care to our users. Our business comprises robust backend distribution services to 6000+ pharmacies across 1100 cities in 27 states and Apollo 24|7, a comprehensive digital health platform, encompassing a wide array of healthcare services such as doctor consultations, medicine home deliveries, diagnostics at home, chronic condition management and insurance offerings.Since its inception in February 2020, Apollo 24|7 has built a user base of more than 33 million users and is facilitated by a network of over 7,000 doctors.
About Advent International
Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in over 415 private equity investments across more than 40 countries and regions, and as of December 31, 2023, had $94 billion in assets under management. With 15 offices in 12 countries, Advent has established a globally integrated team of over 297 private equity investment professionals across North America, Europe, Latin America, and Asia. The firm focuses on investments in five core sectors, including business and financial services; health care; industrial; retail, consumer, and leisure; and technology. For 40 years, Advent has been dedicated to international investing and remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies.
Advent International opened its India office in Mumbai in 2009, with this year marking the start of Advent’s 15th year in India. Advent’s India office has completed over 17 investments (12 current portfolio, 5 exited) since inception, investing a total of ~$5.8 bn in aggregate value. Its other current healthcare portfolio companies include Cohance Life Sciences, Suven Pharma and Bharat Serums & Vaccines.
About Keimed
Keimed is the market leader in wholesale pharma distribution serving 70,000+ pharmacies across 18 states in India with presence across all key markets. Keimed has direct relationship with 300+ manufacturers and offers widest assortment of 45,000+ SKUs. Keimed has built a robust cold chain and supply chain infrastructure with primary focus on safety and quality. With 6,000+ employees and 96 distribution centres across the country, Keimed is committed to its 24 hours Pan-India delivery. Keimed is the most trusted partner to its suppliers, customers, employees and shareholders alike.
