Apollo 24|7 to raise Rs 2,475 Crore from Advent International

Company has entered into a framework agreement to integrate 100% of Keimed, India’s leading wholesale pharma distributor, in a phased manner over the next 24-30 month

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New Delhi: Apollo HealthCo Limited (Apollo 24|7), a subsidiary of Apollo Hospitals has entered into a binding agreement to raise equity capital of Rs 2,475 Crores from Advent International, one of the world’s largest and most experienced global private equity investors.
In addition, Apollo 24|7 has entered into a framework agreement to integrate 100% of Keimed Private Limited, India’s leading wholesale pharma distributor, in a phased manner over the next 24-30 months.
Advent shall invest in compulsory convertible instruments over 2 tranches to secure 12.1% stake in the merged entity, by valuing the combined entity at an enterprise value of Rs 22,481 Crores. Apollo 24|7 is valued at an enterprise value of Rs 14,478 Crores.
Keimed is valued at an enterprise value of Rs 8,003 Crores and pursuant to merger, Keimed shareholders would hold a maximum of 25.7% stake in the combined entity, while AHEL would continue to remain the largest controlling shareholder with at least 59.2% stake. The merger is subject to further corporate approvals to be obtained at the relevant time.
The transaction is subject to conditions precedent and customary approvals.
Dr Prathap C Reddy, Chairman, Apollo Hospitals Group,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.”
Shobana Kamineni, Executive Vice Chairperson, Apollo Hospitals Enterprise Limited said, “Leveraging the Apollo brand, a multi-dimensional team and state-of-the-art tech and products, Apollo 24|7 has scaled faster than its peers in a third of the time. Today marks a new milestone and gives us the ability to double down on what we do best. The size of the merged supply chain will allow 1.4 billion Indians access to genuine medicines within 24 minutes to 24 hours, 7 days a week!”
Suneeta Reddy, Managing Director, Apollo Hospitals Enterprise Limited said, “At Apollo, we believe in putting the consumer at the heart of everything we do. With this belief, we have incubated and grown Apollo HealthCo, and are pleased that a marquee investor like Advent has recognised its inherent value and potential. The merger of Keimed is a significant step in the integration of the comprehensive supply chain. The combined entity will deliver Rs 25,000 Crores of revenue in 3 years with 7-8% EBITDA. This deal brings together a formidable partnership of capabilities and strengths, to deliver exponential value for AHEL and its shareholders”.
Shweta Jalan, Managing Partner and Head of Advent India, commented, “This investment demonstrates Advent’s commitment to investing in the fast growing healthcare sector in India. We can’t wait to partner with the Apollo franchise, a household brand, built with 40+ years of hard work by the Reddy family. Leveraging our deep understanding of the industry in India and globally, we are looking forward to helping accelerate this journey.”
Pankaj Patwari, Managing Director, Advent India,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’.”
Veda Corporate Advisors were the exclusive financial advisors to the transactions.
Shardul Amarchand Mangaldas & Co were the legal advisors to Apollo 24|7, AZB & Partners were legal advisors to AHEL and Cyril Amarchand Mangaldas were legal advisors to Advent for the transactions.