Aster Dm Healthcare Ltd. · NSE:ASTERDM
Aster Dm Healthcare — Merger or Acquisition (November 2024)
40 slides from Aster Dm Healthcare's merger presentation, Nov 29, 2024
Slide 1: Cover letter to exchanges on investor presentation
Date: November 29, 2024 The Secretary The Manager, Listing Department, Listing Department, BSE Limited, The National Stock Exchange of India Ltd 1st Floor, Phiroze Jeejeebhoy Towers Exchange Plaza, C-1, Block G Dalal Street, Mumbai 400001 Bandra Kurla Complex Scrip Code: 540975 Bandra (East), Mumbai
Slide 2: Merger of Aster DM & Blackstone-backed Quality Care
Merger of Aster DM & Blackstone-backed Quality Care Becoming one of the top 3 Hospital Chains in India November 29, 2024
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by Aster DM Healthcare Limited (the "Company"), content of which was compiled from sources believed to be reliable for informational purposes only and are based on information regarding the Company and the economic, regulatory, market and other conditio
Slide 4: Aster DM and Quality Care to merge into a top 3 hospital chain (1/2)
Aster DM and Blackstone-backed Quality Care to merge and create one of the top 3 hospital chains in India with 10,150+ beds (1/2) Overview & Strategic Rationale ▪ One of the largest integrated healthcare providers in India with a network of 191 hospitals, 13 Clinics, 232 labs & PECs, and 2122 pharma
Slide 5: Transaction Overview & Key Terms (2/2)
Aster DM and Blackstone-backed Quality Care to merge and create one of the top 3 hospital chains in India with 10,150+ beds (2/2) Transaction Overview & Key Terms ▪ The board of directors of Aster DM Healthcare Limited (“Aster” or “Aster DM”) approved the merger of Quality Care India Limited (“Quali
Slide 6: Aster DM & Quality Care - Business snapshot
Aster DM & Quality Care - Business snapshot ASTER DM QUALITY CARE ASTER DM QUALITY CARE ▪ One of the leading integrated healthcare ▪ One of the leading healthcare providers with 19 ✓ One of the top 3 hospital chains in India by providers in South India operating 191 hospitals hospitals & 7 medical c
Slide 7: A compelling combination for all stakeholders
A compelling combination for all stakeholders Doctors & Investors and Patients Employees Community Shareholders ▪ The Merged Entity will be ▪ Aligned cultures and value ▪ Unites two organizations ▪ Brings together clinical one of the leaders in systems to enhance doctor committed to transforming exp
Slide 8: Aster DM Overview
Aster DM Overview
Slide 9: Aster – One of the fastest growing hospital chains with strong presence in South India
Aster – One of the fastest growing hospital chains with strong presence in South India About Aster Key Stats Scale of Operations Leading Hospital One of India’s largest and fastest growing hospital chains with significant Network presence in South India Extensive network of 191 hospitals in 15 c
Slide 10: Aster – High standards of clinical excellence
Aster – High standards of clinical excellence Select firsts achieved by Aster Infrastructure center of excellence in APAC – 65 year in India – Minimally Accreditation in South Asia – in India – old with Parkinson’s invasive Laser Patent Foramen st Antimicrobial groundbreaking Enucleation Of the 1st
Slide 11: Aster – Diversified presence across 15 cities
Aster – Diversified presence across 15 cities Kolhapur Hyderabad 254 beds 158 beds ✓ ✓ Bangalore1 Vijayawada2 ✓ 1,092 beds 239 beds ~5,000 ✓ Capacity Beds Calicut Guntur 698 beds 350 beds Successfully added 1,100+ beds in the last 3 ✓ ✓ years, with a clear roadmap to expand by Kannur Ongole 412 beds
Slide 12: Quality Care Overview
Quality Care Overview
Slide 13: Quality Care – One of the largest hospital chains focused on emerging cities
Quality Care – One of the largest hospital chains with focus on emerging cities in India About QCIL Key Stats Scale of Operations2,3 Leading Hospital Troika of brands: CARE Hospitals, KIMSHEALTH and Evercare Network Extensive network of 19 hospitals in 14 cities One of India’s largest hospital
Slide 14: Quality Care – High standards of clinical excellence
Quality Care – High standards of clinical excellence Select firsts achieved by QCIL Infrastructure Accreditation in India to use an in India to perform in Central India to in India to perform 1st indigenous coronary 1st heart surgery on a 1st start 3D laparoscopy 1st womb transplant stent foetus sur
Slide 15: Quality Care – Diversified presence across 14 cities
Quality Care – Diversified presence across 14 cities ✓ Nagpur Raipur 105 beds 379 beds ✓ ✓ Indore Dhaka 222 beds 479 beds 5,150+ Capacity Beds ✓ ✓ Aurangabad Chattogram 338 beds 122 beds Broad and spread-out presence in key regions ✓ offer significant opportunities for brownfield expansion and deepe
Slide 16: Strategic Rationale for the Transaction
Strategic Rationale for the Transaction
Slide 17: Strategic rationale behind the merger
Strategic rationale behind the merger ▪ 1. Scale 4. Growth Potential Merged entity to be one of the top 3 hospital In-built growth potential with established chains in India and with strong presence across hospitals in diverse locations with room for South and Central India brownfield and greenfield
Slide 18: Merged Entity to be one of the top hospital chains by Bed Capacity
Merged Entity to be one of the top 3 hospital chains in India by Bed Capacity Backed by 1 Scale 2 Diversification 3 Enhanced Metrics 4 Growth Potential 5 Synergies 6 Marquee investor ~10,800 10,166 Ranking by Bed Capacity1 6,260 5,172 5,000 4,994 2 4,650 Company A Aster + QCIL Company B QCIL Company
Slide 19: Merged Entity to be one of the top hospital chains by Revenue
Merged Entity to be one of the top 3 hospital chains in India by Revenue Backed by 1 Scale 2 Diversification 3 Enhanced Metrics 4 Growth Potential 5 Synergies 6 Marquee investor FY24 Post Ind AS 43x 50x 40x 22x EV/EBITDA3 2 9,867 Aster + QCIL Ranking by Hospital Revenue1 7,314 6,849 5,686 2 Merger w
Slide 20: Well diversified platform across South and Central India (1/2)
Well diversified platform with presence across South and Central India (1/2) Backed by 1 Scale 2 Diversification 3 Enhanced Metrics 4 Growth Potential 5 Synergies 6 Marquee investor One of the top 3 hospital Chains in India with strong presence across South & Central India QCIL 5 states 8 states 19
Slide 21: Well diversified platform across South and Central India (2/2)
Well diversified platform with presence across South and Central India (2/2) Backed by 1 Scale 2 Diversification 3 Enhanced Metrics 4 Growth Potential 5 Synergies 6 Marquee investor Indore (1) Beds : 222 Raipur (1) Beds : 379 1 Aster DM and QCIL have limited micro-market overlap Nagpur (1) Beds : 10
Slide 22: Well diversified platform with presence across 27 cities
Well diversified platform with presence across 27 cities Backed by 1 Scale 2 Diversification 3 Enhanced Metrics 4 Growth Potential 5 Synergies 6 Marquee investor Aster QCIL Merged Entity 81% Top 5 Cities 19% Others 77% Top 5 Cities 23% Others 80% Top 10 Cities 20% Others 13% 19% 23% 23% 20% 27% 13%
Slide 23: Enhanced Metrics
Enhanced Metrics 1 2 3 4 5 6 Backed by Scale Diversification Enhanced Metrics Growth Potential Synergies Marquee investor Aster + QCIL = Merged Entity (Figures for FY24) No. of Hospitals (Nos) 191 192 38 2x scale Operational Metrics City Presence (Nos) 15 14 27 12 new cities Beds Capacity3 (Nos) ~5,
Slide 24: Favorable mix of scaled and growing hospitals for the merged entity
Favorable mix of scaled and growing hospitals for the merged entity Backed by 1 Scale 2 Diversification 3 Enhanced Metrics 4 Growth Potential 5 Synergies 6 Marquee investor Total Addition of ~3,500 beds, funded entirely through internal accruals/cash on hand bringing the total bed capacity to ~13,30
Slide 25: Multiple avenues of synergies poised to accelerate growth and profitability
Multiple avenues of synergies poised to accelerate growth and profitability Backed by 1 Scale 2 Diversification 3 Enhanced Metrics 4 Growth Potential 5 Synergies 6 Marquee investor Integrated ✓ Broader base of star senior specialists and exchange of learnings Doctor Model ✓ Greater ability to attrac
Slide 26: Backing of Global Marquee PE Investor
Backing of Global Marquee PE Investor Backed by 1 Scale 2 Diversification 3 Enhanced Metrics 4 Growth Potential 5 Synergies 6 Marquee investor Select India Investments Brief Description • World's largest alternative asset manager, which has invested in industry- Leading IT services Leading affordabl
Slide 27: Inter-se Valuation for the Merger
Inter-se Valuation for the Merger
Slide 28: Interse Valuation – Aster's valuation reflects a 45% higher multiple relative to QCIL
Interse Valuation – Aster’s valuation reflects a 45% higher multiple relative to QCIL FY24 EV/EBITDA (Adj. Post INDAS1) Interse Shareholding 11.4x multiple difference Aster QCIL (In INR Cr) 36.6x Equity Value 22,7942 16,9832 Inter-se Shareholding 57.3% 42.7% 25.2x Shareholding Pattern post merger As
Slide 29: Aster DM Quality Care Limited - Financials
Aster DM Quality Care Limited - Financials
Slide 30: Merged entity with diversified revenue mix and strong margin profile
Merged entity with diversified revenue mix and strong margin profile Aster QCIL Merged Entity 7,314 6,183 5,351 Revenue 3,699 3,615 2,983 2,968 3,200 (INR Cr) 2,384 FY22 FY23 FY24 FY22P FY23P FY24P FY22P FY23P FY24P Margin 14.8% 16.0% 16.8% 20.9% 21.3% 21.5% 18.2% 18.7% 19.1% 1,396 1,158 Adj. Post I
Slide 31: Entities of similar scale with strong operating metrics
Entities of similar scale with strong operating metrics creating a robust merged entity Aster QCIL Merged Entity 8,925 9,752 8,403 4,317 4,867 4,498 4,608 4,885 # of Capacity 3,905 beds FY22 FY23 FY24 FY22P FY23P FY24P FY22P FY23P FY24P 66% 68% 68% 62% 62% 63% 64% 65% 65% Occupancy % FY22 FY23 FY24
Slide 32: Structure & Transaction Timelines
Structure & Transaction Timelines
Slide 33: High level of corporate governance standards followed for the merger
High level of corporate governance standards followed for the merger Due Diligence • Due Diligence undertaken by market leading firms across legal, financial, tax, technical, ESG, commercial, and IT • Leading consulting firm advised on potential synergies Valuation Advisors • Prominent valuation adv
Slide 34: Transaction structure (1/2)
Transaction structure (1/2) 0 Current Structure (As of Date) Aster Public Blackstone TPG Others Promoters 58.1% 71.8% 23.9% 4.2% 41.9% Aster DM Healthcare Limited QCIL 32
Slide 35: Transaction structure (2/2)
Transaction structure (2/2) 1 Post Initial Share Acquisition Structure Step 1 Initial Share Acquisition - Aster to acquire 5% stake in QCIL & issue equivalent value of Aster shares Aster Public Blackstone Blackstone TPG Others Aster DM ▪ Aster DM will purchase 5.0% Promoters / TPG 56.0% 68.1% 22.7%
Slide 36: Indicative transaction timeline & key steps
Indicative transaction timeline & key steps Q3FY25 Q4FY25 Q1FY26 Q2FY26 Q3FY26 Board Approval Shareholders’ meeting to consider approval for Preferential Issue as part of initial share acquisition Receipt of CCI Approval Completion of initial share acquisition Receipt of no-objection letter from the
Slide 37: Bankers & Advisors to Aster
Bankers & Advisors to Aster Financial Advisors Legal/Tax Financial Advisors Advisors Due Diligence Independent Advisors Finance, Tax & ESG DD Commercial DD Technical DD IT DD Valuers Accounting and Tax Advisor Corporate Advisor Independent Valuation Independent valuer Fairness Opinion 35
Slide 38: Appendix
Appendix
Slide 39: Quality Care – Journey and Impact
Quality Care – Journey and Impact Over 20 years of legacy, impacting 3.25 million lives with quality and trust Banjara Raipur Bhubaneshwar Blackstone & TPG acquired Quality Started flagship Acquired hospitals Care and KIMS in Banjara facility at in Indore and a back-to-back Hyderabad Aurangabad tran
Slide 40: Thank You
Thank You
Aster DM Healthcare — Merger or Acquisition (November 2024) on 6ix