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Fortis Healthcare Continues Asian Expansion

Posted on Mar 08, 2011 by Sergio Ulloa ()

Fortis Healthcare Ltd, the Indian private hospital chain, has bought a 28.6 percent stake in Lanka Hospitals Corporation, a privately operated hospital in Sri Lanka for a reported US$ 36 million. The minority share in the Sri Lanka-based private hospital was bought through Fortis' overseas investment arm, Fortis Global Healthcare Holdings, which was established in Singapore as a platform for private investment within the Asia-Pacific healthcare sector. Lanka Hospitals is currently traded on the Colombo Stock Exchange, with the state-run Sri Lanka Insurance Corporation Limited being the majority stakeholder in the Sri Lankan private hospital. The Colombo-based Lanka Hospitals operates a 350-bed healthcare hospital, which is equipped with specialist medical treatment facilities and is one the major privately operated healthcare facilities in the country. The deal allows Fortis access to the island nation's population of over 21 million people and an economy which has developed over the last decade. The Indian hospital group regards the acquisition as a tremendous opportunity to expand in an emerging nation through one of Sri Lanka's most advanced private hospitals. The Lanka Hospitals deal follows Fortis' decision to increase its stake in the Australian Dental Corporation Holdings from 33 percent to 58.6 percent earlier this year. Fortis bought into the general and specialist dental practices network in order to gain access to the Australian and New Zealand dental market and, in doing so, acquire the use of the successful structural model adopted by the Dental Corporation. The acquisition means Fortis has increased its exposure within the Asia-Pacific mature private health sector, allowing them to build on its presence in the region. In 2010, Fortis failed in its ambitious bid to acquire Singapore's largest private hospital chain Parkway; withdrawing its original offer. This subsequently allowed Khazanah Nasional Berhad of Malaysia to acquire a 25 percent stake in Parkway. Fortis Healthcare, which is primarily owned by billionaire brothers, Malvinder Mohan Singh and Shivinder Mohan Singh, has stepped up plans over the last year to increase the Fortis network by cultivating the private healthcare chain. Fortis has been leading the race in expanding its footprint within its home healthcare market in India, together with ventures throughout the Asian region in order to capitalize on the increasing demand for private healthcare. The Asian healthcare sector has been one of the growth markets in the region accelerating in line with strengthening economies and the rapidly growing wealth of a middle class population willing to pay for treatment and care from the private healthcare sector. This is coupled with the flourishing medical tourism market in Asia, which provides for international visitors taking advantage of quality healthcare facilities at a fraction of the cost of treatment in domicile western hemisphere countries. The Sri Lankan economy is one the fastest growing in Southern Asia and, since the end of the civil war in 2009; the country has become a sound prospect for investment. The government of Sri Lanka has invested significantly in the local economy and reported GDP totaled US$$104.7 billion in 2010; the South Asian nation is now well positioned for further growth. Fortis Healthcare reported third quarter earnings for the period ending 31st December 2010, which totaled US$90 million. This reflected the buoyant demand for treatments in the company's hospital network across India. Fortis' strategy within the home market of India has been to consolidate the private hospital network across tier I, II and III cities in order to meet the increasing demand for healthcare services in India. Although Fortis Healthcare is mainly a healthcare provider in India, the group has set up the investment vehicle - Fortis Global Healthcare Holdings - to facilitate international acquisitions in Asia's growing private healthcare sector. Companies Mentioned Fortis Healthcare Limited Fortis Healthcare - IndiaFortis Healthcare Limited is a healthcare provider having a network of 53 hospitals, satellite centers and heart command centers with nearly 8000 beds capacity. The Lanka Hospitals Corporation PLC Lanka Hospitals - Sri LankaThe Lanka Hospitals Corporation plc was formerly known as Apollo Hospitals offering healthcare services in Sri Lanka. Lanka Hospitals provides emergency, cardiac thoracic, dental clinic, kidney care centre, fertility centre, health check, paediatric treatment, diagnostic, cosmetic centre, blood bank and general surgery services. The Dental Corporation The Dental CorporationThe Dental Corporation was founded in 2007 to partner and acquire high quality general and specialist dental practices run by experienced practitioners. The Dental Corporation is comprised of over 140 practice sites based across Australia and New Zealand.
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