KKR, one of the leading global investment firms, has announced plans to acquire up to 54% of the equity stake of Healthcare Global Enterprises (HCG), India's largest oncology hospital chain, from CVC Asia V for approximately $400 million. This strategic acquisition is significant not only for KKR and CVC but also for the healthcare sector within India, heralding transformative advancements for cancer care services across the country.
The deal will see KKR initially purchasing shares at ₹445 each from CVC, followed by making an open offer to the company's minority shareholders for up to 26% more. This step is mandated by the Securities and Exchange Board of India (SEBI) regulations. Depending on the response from shareholders, it is anticipated KKR’s total stake might eventually range between 54% and 77% after the acquisition wraps up.
Akshay Tanna, Partner and Head of India Private Equity at KKR, reflected on the motivation behind this sizable investment, stating, “HCG is a pioneer in cancer care in India and has established itself as an important healthcare provider in the country for the past three decades. Our investment will support the development of medical infrastructure and the delivery of critically needed oncology services and care to more patients.”
Founded by oncologist Dr. BS Ajaikumar in 1989, HCG has grown to operate 25 medical care centers across 19 cities, boasting over 2,500 beds, nearly 100 operating theatres, and 40 linear accelerator machines, which are pivotal for radiation therapy. The hospital chain’s expansion offers not just medical treatment but also pivotal research opportunities within the oncology sector.
Presently, CVC holds about 60% of HCG, but with this transition, KKR will take the reins as the principal shareholder. Dr. Ajaikumar will remain integral to the company, assuming the role of Non-Executive Chairman. He expressed gratitude toward CVC, saying, “I want to thank CVC for their support through the years, helping the management to put HCG in the strong position it is today. I am delighted to welcome KKR.”
This transition arrives at a moment when India is at the cusp of significant evolution concerning healthcare access. The number of cancer patients is rising, with projections indicating about one in every nine individuals will face a cancer diagnosis during their lifetime. While many private-sector hospitals are gearing up to expand their oncology departments, Dr. Ajaikumar has shared insights on the increased interest from the government to invest substantially, which includes the establishment of cancer care centers across district hospitals.
While HCG continues to expand its footprint—recently announcing new state-of-the-art cancer care facilities in Bengaluru—concerns loom over its revenue concentration risks as over half of its earnings stem from Karnataka and Gujarat. Financial reports indicate HCG generated revenues of ₹558 crore for the quarter ending December 2024, with profits surging to ₹7 crore, marking growth of 16% for the first nine months of FY25 compared to the previous year.
Amit Soni, Partner at CVC, emphasized the successful collaboration, stating, “Our partnership with Dr. Ajaikumar and the management team is testimony to the ability to combine clinical and professional acumen to increase the reach of cancer care in India.” Given CVC’s collaborative work with HCG since 2020, the transition seems promising as it heads toward potential growth, supported by KKR’s financial strength and global healthcare expertise.
This latest investment marks KKR’s continuous commitment to enhancing its healthcare portfolio within India. Previously, the firm has invested heavily across various healthcare sectors, including Baby Memorial Hospital and Healthium, among others. The firm’s strategy reflects broader trends observed within the healthcare industry, reinforcing the demand for sophisticated cancer treatment frameworks to tackle the rising incidence rates.
The acquisition is set to be finalized by the third quarter of 2025, contingent upon customary closing conditions and regulatory approvals. With plans for HCG to retain its operational strengths under Dr. Ajaikumar’s leadership, alongside KKR’s backing, stakeholders and patients alike can anticipate solutions driving enhancements to cancer care nationwide.
India stands at the forefront of increasing healthcare needs and the urgency for refined cancer treatments. The impending partnership between KKR and HCG is expected to forge innovative pathways for medical infrastructure and improve outcomes for patients accessing cancer care—a promising development against the backdrop of rising oncology incidence.