Aster DM Healthcare, Quality Care to merge to create one of the top three hospital chains in India

 Aster DM Healthcare and private equity firms Blackstone and TPG-backed Quality Care India Limited are set to merge in a move that will create one of the top three hospital chains in India.

The merger has been approved by the board of directors of the two companies and the merged entity will be named Aster DM Quality Care Limited. The deal is subject to shareholder and regulatory approvals.

"The new combined entity is poised to become one of the largest healthcare players in the industry, setting new benchmarks in patient-centric care, innovation, and accessibility," said Azad Moopen, founder and chairman of Aster DM Healthcare.

The Moopen family, who has been instrumental in managing Aster's business in India and the Gulf countries, will also lead the new merged entity.

"The integration of Aster and Quality Care’s extensive network and deep operational expertise with backing from Blackstone and TPG will enhance our ability to deliver world-class healthcare services, drive innovation, and improve patient outcomes," said Moopen.

Aster DM Quality Care Ltd will have a combined portfolio of four leading brands—Aster DM, Care Hospitals, KIMSHEALTH and Evercare. The combined entity will have a network of 38 hospitals and more than 10,150 beds spread across 27 cities making it one of the top three hospital chains in the country. There will be a strong presence across south and central India.

The merger is expected to be earnings per share (EPS) accretive and the companies see substantial revenue growth opportunities. They also see significant opportunities for expansion, with 3,500 new beds expected between financial years 2024 to 2027.

“We are committed to creating one of India’s leading platforms in the healthcare sector. Using our scale, operational expertise, and global life sciences insights, we will help grow the platform, expand its footprint, and develop it into a world-class healthcare institution," said Amit Dixit, head of Asia for Blackstone Private Equity.

Varun Khanna, the group MD of Quality Care, said the merger furthers their commitment to address bed shortage in India's underserved regions.

Post the merger, the promoters of Aster and Blackstone will hold 24 per cent and 30.7 per cent respectively in the merged entity. The rest of the 45.3 per cent stake will be held by the public and other shareholders.

Depending on necessary approvals, Aster promoters and Blackstone will hold equal representation on the board and will jointly oversee the merged company. Azad Moopen will remain the executive chairman, while Khanna will be the MD and group CEO.