Fortis Healthcare said it has signed definitive agreements for sale of its hospital company operations at Vadapalani, Chennai to Kauvery Group of Hospitals for a sale worth Rs.152 crore. The transaction will be an all-cash deal and is projected to be consummated by end of July 2023. The Vadapalani establishment, which is on leased premises, was commissioned in October 2020 and is situated on the arterial Arcot Road. It currently has 110 operational beds with a potential to scale up to 200 beds

Fortis stated the divestment will be part of the hospital chain's ongoing portfolio rationalization in order to focus on deepening its presence in select geographic clusters where it has a sizeable presence. “This (divestment) also underpins our focus on improving our overall profitability and margins in the section, allowing us to re-allocate capital in our key clusters,” said Dr. Ashustosh Raghuvanshi, MD & CEO of Fortis.

The acquisition of Vadapalani facility is in line with Kauvery’s strategy to further expand its presence in Chennai, in addition to its existing facilities of over 500 beds at Alwarpet and Radial Road. Kauvery had raised $70 million in equity funding from a private equity fund managed by IIFL Asset Management Limited (IIFL AMC) for a minority stake in March this year. Kauvery said it will be using the proceeds for growth, which includes selective acquisitions. With this acquisition, we will have 750+ beds in Chennai," said Dr. S Chandrakumar, executive Chairman of Kauvery.