True North, a leading private equity fund, has purchased a 51% stake in Max Bupa Health Insurance Company from Max India. The purchase is valued at Rs.510.51 crore. The all-cash transaction has valued Max Bupa Health Insurance at Rs.1,001 crore. Max India stated that it will use the proceeds to make investments in new and existing business opportunities. The transaction is likely to be completed by FY 2020.
Max Group, which is led by Mr. Analjit Singh, has divested its entire 51% stake in the health insurance company. Bupa, which is a joint venture partner in the health insurance company, will continue to hold a 49% stake in the company. Once the transaction is completed, True North will be nominating directors to the board of Max Bupa, while the directors nominated by Max India will be stepping down. KPMG Corporate Finance was appointed as the sole lead advisor for the transaction.
Mr. Analjit Singh, who leads Max Group, recently also sold Max Hospitals to Radiant Life Care. Once the company exits from Max Bupa Health Insurance, it will have Antara Senior Living and Max Life Insurance under it.
True North, which is a mid-market buyout investor, is one of the biggest private equity houses in India. The company manages assets over $2 billion. The investment company has backed more than 35 high-growth companies.
Max Bupa Health Insurance was established in the year 2008. The company is headed by Mr. Ashish Mehrotra, while Mr. Rajesh Sud serves as the chairman of the firm. The health insurance company distributes its insurance policies through its bancassurance partners, which include Bank of Baroda, Karur Vysya Bank, and HDFC, and its agency force.
Max Bupa has a paid-up capital of around Rs.926 crore. For the fiscal that ended in March 2018, the company registered a total profit of Rs.23 crore, which was earned on a premium base of Rs.754 crore.
Source: The Times of India, Business Today, VCCircle