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India Equity Research Reports, IPO and Stock News
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FORH is acquiring Fortis International from the promoters in an all cash
deal. Valuations have not yet been disclosed, though we are surprised at
the sudden and unexpected changed in FORH's stated strategy that it
would only focus on the Indian market and the private entity would be the
vehicle for international expansion. We would review earnings estimates
pending more disclosures, but prima facie, we believe that premium
valuations for hitherto ’India-focus’ business stand to be de-rated.
An unexpected change in strategy. FORH has announced that it is
acquiring Fortis Healthcare International, a private entity held by the FORH
promoters. This comes as a surprise to us, as in the past FORH management
have maintained that the listed entity in India would focus only on domestic
market, while the privately owned entity would be the vehicle for
international growth.
What does the acquisition bring to the table? The international
operations have presence in nine countries - HK, Australia, NZ, Singapore,
Sri Lanka, Dubai, Vietnam and Canada and include dental clinics, day care
centers and hospitals. The combined entity will have over 74 hospitals, 188
day care facilities, 190 diagnostic facilities and 12,000 hospital beds.
Deal value not disclosed. FORH has not disclosed the deal value, except
that it would be an all cash deal and valuation would be carried out by an
independent agency. Financials for the international business have not been
disclosed either, except that the combined entity will have revenues of
USD1B, which on the back of envelope calculation suggests that
international operations have revenues of about USD475M
Earnings, valuations under review. Our earnings estimates are under
review pending more disclosures on the international business financials.
Given that post acquisition, FORH business will be characterized by multicountry
operations we believe that 'premium' valuations for the hitherto
'India focus business' stand to be de-rated.
Acquisition of Fortis Hospitals International from Promoters
Signaling a major shift in its publically stated stand of focusing only on the Indian
market, FORH has announced that that it is acquiring Fortis Healthcare International,
a private entity held by the FORH promoters. We are surprised at this sudden change
in strategy - management comments on the revenues (USD1B revenues) of the
combined business seems to suggest that achieving 'scale' is the key rational for this
transactions, especially given that FORH had recently acquired 71.4% stake in Super
Religare Laboratories from the promoters for about USD170MM. The deal value has
not been disclosed, only that it will be an all cash deal valued by an independent
entity.
The international operations have presence in nine countries - HK, Australia, NZ,
Singapore, Sri Lanka, Dubai, Vietnam and Canada and include dental clinics, day
care centers. The international operations have largely been built over past 1 year
through multiple acquisitions. We enumerate below the key acquisitions made by
Fortis International over past 1 year. Based on the publicly available information, we
gather that FORH promoters have invested over USD550M over past 1 year on
acquisitions alone.
Premium Valuations May Not Sustain
FORH is trading at a significant valuation premium to its Asian Peers. However, we
believe that premium valuations may not sustain following the deal, given that post
acquisition, FORH business will be characterized by multi-country operations and
we believe that 'premium' valuations for the hitherto 'India focus business' stand to
be de-rated. Our earnings estimates for FORH are under review pending disclosures
on international business financials and deal valuations.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
FORH is acquiring Fortis International from the promoters in an all cash
deal. Valuations have not yet been disclosed, though we are surprised at
the sudden and unexpected changed in FORH's stated strategy that it
would only focus on the Indian market and the private entity would be the
vehicle for international expansion. We would review earnings estimates
pending more disclosures, but prima facie, we believe that premium
valuations for hitherto ’India-focus’ business stand to be de-rated.
An unexpected change in strategy. FORH has announced that it is
acquiring Fortis Healthcare International, a private entity held by the FORH
promoters. This comes as a surprise to us, as in the past FORH management
have maintained that the listed entity in India would focus only on domestic
market, while the privately owned entity would be the vehicle for
international growth.
What does the acquisition bring to the table? The international
operations have presence in nine countries - HK, Australia, NZ, Singapore,
Sri Lanka, Dubai, Vietnam and Canada and include dental clinics, day care
centers and hospitals. The combined entity will have over 74 hospitals, 188
day care facilities, 190 diagnostic facilities and 12,000 hospital beds.
Deal value not disclosed. FORH has not disclosed the deal value, except
that it would be an all cash deal and valuation would be carried out by an
independent agency. Financials for the international business have not been
disclosed either, except that the combined entity will have revenues of
USD1B, which on the back of envelope calculation suggests that
international operations have revenues of about USD475M
Earnings, valuations under review. Our earnings estimates are under
review pending more disclosures on the international business financials.
Given that post acquisition, FORH business will be characterized by multicountry
operations we believe that 'premium' valuations for the hitherto
'India focus business' stand to be de-rated.
Acquisition of Fortis Hospitals International from Promoters
Signaling a major shift in its publically stated stand of focusing only on the Indian
market, FORH has announced that that it is acquiring Fortis Healthcare International,
a private entity held by the FORH promoters. We are surprised at this sudden change
in strategy - management comments on the revenues (USD1B revenues) of the
combined business seems to suggest that achieving 'scale' is the key rational for this
transactions, especially given that FORH had recently acquired 71.4% stake in Super
Religare Laboratories from the promoters for about USD170MM. The deal value has
not been disclosed, only that it will be an all cash deal valued by an independent
entity.
The international operations have presence in nine countries - HK, Australia, NZ,
Singapore, Sri Lanka, Dubai, Vietnam and Canada and include dental clinics, day
care centers. The international operations have largely been built over past 1 year
through multiple acquisitions. We enumerate below the key acquisitions made by
Fortis International over past 1 year. Based on the publicly available information, we
gather that FORH promoters have invested over USD550M over past 1 year on
acquisitions alone.
Premium Valuations May Not Sustain
FORH is trading at a significant valuation premium to its Asian Peers. However, we
believe that premium valuations may not sustain following the deal, given that post
acquisition, FORH business will be characterized by multi-country operations and
we believe that 'premium' valuations for the hitherto 'India focus business' stand to
be de-rated. Our earnings estimates for FORH are under review pending disclosures
on international business financials and deal valuations.
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