Fortis Healthcare Ltd. has put its Singapore assets up for sale as part of a push to focus on its domestic market, people with knowledge of the deal said, in what would be the latest overseas disposal by the Indian-owned hospital firm.
Run by billionaire brothers Malvinder Singh and Shivinder Singh, Fortis expanded in countries from Australia to Vietnam. But in recent years, the company has cut its overseas exposure with sales of hospital stakes in Hong Kong, Australia, and Singapore. It has, in the process, reduced its debt levels. It is now looking to sell its remaining Singapore interests, namely three hospitals--Fortis Surgical Hospital, RadLink-Asia and Singapore Radiopharmaceuticals--which could raise about US$150 million, the people said.
A Fortis spokesman declined to comment, but said the company is focused on its home market. "Our stated position is that we want to focus on India operations, particularly on hospitals and diagnostics."
The Indian company first moved to Singapore in March 2010 when it spent US$685 million to acquire a 25% stake in Parkway Holdings Ltd., a health care operator in the city-state.
But the investment was short-lived. Just four months after they bought the stake, the brothers lost a takeover battle for Parkway to IHH Healthcare Bhd., a hospital operator backed by Malaysian sovereign-wealth fund Khazanah Nasional Bhd.
Parkway, which operates both Mount Elizabeth Hospital and Gleneagles Hospital in Singapore, has been aggressive in its Asian expansion. Last year, Parkway announced plan to build a Gleneagles Hospital in Hong Kong.
The Singh brothers sold their Parkway stake and made a profit of 116.7 million Singapore dollars ($92 million). Apart from that, Fortis has raised nearly another US$700 million with stake sales. It sold its investment in Hong Kong's Quality Healthcare for US$355 million late last year and unloaded Dental Corp. Holdings Ltd in Australia for another $276 million.
In selling its Singapore assets, Fortis is hoping to capitalize on a wave of recent interest in health care deals in the region. Last year, about $24.7 billion worth of health-care deals were reachedin Asia, according to Dealogic, a 72% increase from a year earlier and the highest level of deal activity for the sector in more than a decade.
Asia's growing middle classes are creating more demand for health-care services and private-equity firms have taken an interest, due to the steady returns offered.
In India, health care deal volume more than doubled last year to $4.7 billion. In Southeast Asia, volume more than doubled to $1.9 billion.
Fortis has health care operations in India, Singapore, Dubai, Mauritius and Sri Lanka. It has 65 facilities including projects under development, more than 10,000 potential beds, and more than 240 diagnostic centers. Fortis says the Indian health-care sector is growing at an annual rate of 15% and revenues are expected to hit US$150 billion by 2017.