Keimed and Apollo Health Co. together to form a combined firm valued at Rs 22,481 crore

The healthcare industry has seen a noteworthy merger as Apollo Health Co Limited (AHL), a division of Apollo Hospitals Enterprise Limited (AHEL), and wholesale pharmaceutical distribution business Keimed have joined forces. As a result, the two firms’ total enterprise value is now Rs 22,481 crore.

Although the family of the Apollo promoter owns Keimed, AHL, an omni-channel healthcare platform, will take use of the former’s extensive nationwide network of over 70,000 pharmacies.The following 24 to 30 months will see a staged implementation of the integration. The announcement also said that Veda Corporate Advisors served as the transactions’ only financial adviser.

AHL’s business includes backend distribution services to over 6,000 pharmacies in 1,100 cities as well as Apollo 24|7, a comprehensive digital health platform that offers a range of healthcare services, including prescription drug deliveries, home health diagnostics, managing chronic conditions, and insurance services.

AHL said in a statement released here on Friday that it has signed a legally binding contract with Advent International, a worldwide private equity investor, to raise equity capital of Rs 2,475 crore. With an enterprise value of Rs 22,481 crore, it would invest in mandatory convertible instruments across two tranches to acquire a 12.1% interest in the combined company.

Keimed is valued at Rs 8,003 crore, whilst AHL has an enterprise value of Rs 14,478 crore. As a result of the merger, AHEL would continue to be the biggest controlling shareholder with at least 59.2% of the merged company, while Keimed stockholders would have a maximum of 25.7%.
“With Advent’s investment and the merger of Keimed, the combined entity will be one of the country’s leading retail health companies,” said Prathap C. Reddy, chairman of Apollo Hospitals Group.

“The merger of Keimed is a significant step in the integration of the comprehensive supply chain,” said Suneeta Reddy, managing director of AHEL. In three years, the merged company would generate Rs 25,000 crore in sales with an EBITDA of 7-8%.
Managing director of Advent India Pankaj Patwari said, “We are trying to build India’s largest omnichannel health-tech platform.”