Private equity firm Advent International has unveiled its plans to invest INR24.75bn ($300m) in Apollo HealthCo (Apollo 24|7 or AHL), a digital health platform owned by India-based Apollo Hospitals Enterprise.
Furthermore, Apollo 24|7 has entered into a framework agreement to gradually integrate 100% of Keimed, an Indian wholesale pharmaceutical distributor, over the course of the next 24-30 months.
Apollo 24|7, which was founded in 2020, is said to have a user base of over 33 million users along with a network of more than 7,000 doctors. Its holding company Apollo Healthco provides distribution services to more than 6,000 pharmacies across 1,100 cities in 27 Indian states.
On the other hand, Keimed is claimed to cater to more than 70,000 pharmacies across 18 Indian states. The company has over 6,000 employees and 96 distribution centres in India.
Advent plans to invest in compulsory convertible instruments across two phases to get a 12.1% stake in the combined pharmacy entity, valuing it at an enterprise value of INR224.81bn ($2.7bn).
The private equity firm said that Apollo 24|7 is valued at INR144.78bn and Keimed at INR80.03bn.
Under the deal, Keimed shareholders will potentially hold up to 25.7% in the new entity, while Apollo Hospitals Enterprise retains its status as the largest controlling shareholder with a minimum of 59.2%.
The merger is contingent upon obtaining additional corporate approvals at the relevant time.
Advent India managing director Pankaj Patwari 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’.”
The enlarged company will establish a business model with nationwide reach in India and achieve significant business synergies.
Apollo Hospitals Group chairman Prathap Reddy 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.”
