Fortis Healthcare in the pink of health after overseas acquisition


Fortis Healthcare jumped 3.53% to Rs 184.65 at 9:48 IST after the company said it will buy 23.9% of Singapore's Parkway Holdings from US buyout firm TPG Capital as a part of its expansion drive into Asia and the Middle East.

The announcement was made before trading hours today, 12 March 2010.

Meanwhile, the BSE Sensex was up 50.90 points, or 0.30%, to 17,218.86.

On BSE, 17.51 lakh shares were traded in the counter as against an average daily volume of 5.87 lakh shares in the past one quarter.

The stock hit a high of Rs 187.45, a record high. It hit a low of Rs 180 so far during the day. The stock had hit a 52-week low of Rs 65.60 on 17 March 2009.

The stock had outperformed the market over the past one month till 11 March 2010, soaring 17.45% compared with the Sensex's 6.29% rise. It outperformed the market in past one quarter, spurting 51.46% as against 0.29% decline in the Sensex.

The mid-cap healthcare chain has an equity capital of Rs 317.34 crore. Face value per share is Rs 10.

The current price of Rs 184.65 discounts the company's Q3 December 2009 annualised EPS of Rs 1.56, by a PE multiple of 118.36.

The $685 million deal will give Fortis a foothold in Singapore and Malaysia and make it the biggest private hospital network in Asia, it said.

Parkway has 16 hospitals with 3,400 beds spread over six countries, including India and the United Arab Emirates. It also has a controlling stake in Parkway Life REIT, a property trust that owns hospitals and nursing homes across Asia.

The latest deal will increase Fortis' hospital network to 62, which the company said would make it the biggest hospital network in Asia, with more than 10,000 beds.

Fortis' chairman Malvinder Mohan Singh was quoted by the media as saying that the company intends to move into other parts of Asia and the Middle East.

Fortis has no immediate plans to raise its stake in Parkway and plans to work with the Singapore firm in expanding across the region, added Singh, who will be nominated as chairman of Parkway.

Fortis will be the largest shareholder in Parkway, with a stake slightly higher than the 23.32% held by Malaysian state fund Khazanah Nasional Bhd.

Fortis' latest purchase follows its $187 million acquisition of 10 hospitals of Wockhardt Hospitals in August 2009.

Last month, the hospital chain's board approved a proposal to raise Rs 1250 crore through preference shares, overseas shares or foreign currency bonds.

Fortis Healthcare reported a net profit of Rs 12.40 crore in Q3 December 2009 compared with a net loss of Rs 1.67 crore in Q3 December 2008. Sales rose 12.4% to Rs 49.44 crore in Q3 December 2009 over Q3 December 2008.

Fortis Healthcare is engaged in healthcare services. The company's network of hospitals includes multi-specialty as well as super-specialty centers.

Promoters have pledged 2.76 crore shares, or 8.71% of the equity capital of the company. The total promoter shareholding in the company is 76.47% (end December 2009).




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