Private healthcare provider Max Healthcare Limited has entered into a share purchase agreement (SPA) to acquire 100% stake in Starlit Medical Centre Pvt Ltd for ₹940 cr, according to the regulatory filing of the company.

Starlit, which has an enterprise value of ₹940 crore, had entered into a business transfer agreement (BTA) with Sahara India Medical Institute Ltd for the purchase of a healthcare undertaking consisting of 550 bedded Sahara Hospital, Lucknow, on a slump sale basis, the company says.

Crosslay Remedies Limited (CRL), a wholly-owned subsidiary of Max Healthcare, which owns and operates Vaishali-based Max Super Speciality Hospital and Noida-based Max Medical Centre has executed the special purchase agreement. Max Healthcare acquired Crosslay Remedies Limited in July 2015 as a part of the acquisition of erstwhile Pushpanjali Crosslay Hospital, Vaishali.

"We are excited about this acquisition, which is in line with our strategy to enter new Tier I / II cities which have a developed healthcare services ecosystem. Given our track record of successful post-merger integration, we expect to quickly improve the operating and financial performance on the strength of the medical excellence of our clinicians and continued patronage from our patients. Through our presence in Lucknow, we aim to bring quality healthcare to the people of Uttar Pradesh," says Abhay Soi, chairman and managing director, Max Healthcare Institute Ltd.

As per the regulatory filing by the company, the 17-storeyed Starlit hospital is spread over approximately 27 acres of land and offers multi-disciplinary care in various specialities like gastroenterology, neuro, surgery, cardiology, pulmonology and diagnostics facilities.

"This acquisition marks Max Healthcare’s entry into Lucknow, one of the fastest-growing cities of Uttar Pradesh. Max Healthcare will bring high-end medical programmes such as oncology and organ transplants and strengthen the existing programmes like orthopaedics, cardiac sciences, neurosciences, renal sciences, etc," the healthcare provider says.

In the July to September quarter of FY24, the consolidated net profit of the healthcare provider fell by 39.5% to ₹276.68 crore as against ₹457.35 crore in the same period last year. The company’s revenue from operations in the September quarter witnessed a 19% increase to ₹1,363 crore. In the September quarter, the healthcare provider’s average revenue per occupied bed (ARPOB) improved by 13% to ₹74,600 as against ₹66,000 in the same period last year.

According to analysts at brokerage firm Motilal Oswal, the addition of beds, improved realisation per patient, and the optimisation of the case mix/payor mix are expected to drive sustained profitability and consistent earnings growth for the company. "Further, MAX continues to be on the lookout for any M&A opportunities, which can also aid better return ratios going forward," says the brokerage firm.

The share price of the company closed 1.26% higher at ₹677.50. This is in line with the broader BSE Sensex, which closed 303.91 points or 0.44% higher at 69,825.60.

Starlit Medical Centre Pvt Ltd

Max Healthcare acquires 550-bed Sahara Hospital for ₹940 cr