PE firm Advent International invests $105m in Care Hospital.

Private equity firm Advent International has picked up equity in hospital chain Care by investing $105 million. With this the healthcare services provider hopes to consolidate its position in the sector and bet big on the growth opportunities to set up more hospitals in Tier II locations.
“We believe that there is tremendous potential in the Indian healthcare market. Through this, Advent brings relevant global experience to support Care’s expansion plans in India as the hospital chain aspires to match the best international benchmarks in healthcare delivery,” said Georg Stratenwerth, managing director of Advent India PE Advisors.

For the undisclosed equity that Advent holds, it has acquired shares from some of the existing investors and injecting additional capital into the business. Post the investment, the management continues to be the same. The multi-specialty chain has presence in southern cities like Hyderabad, Vishakapatnam among others cities like Raipur, Bhubaneshwar, Nagpur and Pune.

“The partnership with Advent provides us with the required resources and support to expand our presence and reiterates our commitment in providing the best in healthcare” said Care Hospital founder B Soma Raju adding that the hospital had begun in 1997 with a 100-bed facility.

The hospital chain, which specialises in cardiac care, neurology, nephrology and general medicine, is said to be ranking 5th among all hospitals in the country in terms of number of beds and revenue. The group has a total of 1,590 beds across eleven hospitals.

Prior to Care, Advent had invested in CAMS, which is into providing of outsourced transaction processing for mutual funds and insurance along with Element-K, a corporate e-learning business acquired by SkillSoft. Advent International has globally invested in over 30 healthcare companies worldwide across a broad range of sub-sectors, including pharmaceuticals, healthcare services and medical equipment.

Prerequisites of procurement - medical equipment

The first choice customer has to make between buying/leasing new or pre owned equipment. A refurbished machine of your specification and only a few years old can save you a hefty amount. The machine opted should be under a regular service maintenance contract since its purchase. Certification and system inspection at the time of purchase proves good result for the user in the long run. Purchase should be made only after complete testing by staff trained in accordance with manufacturer’s specification.

Planning economical Medical equipment one needs to make choices between the manufacturers, size of the machine, upgradeability and versatility of applications. The entire above criterion must be discussed or referred to some old/experienced user of the machine .Going ahead with buying an ultrasound machine one needs to take care of all the accessories in the first case.    

While buying the machine the buyer should insist on warranty of at least one year for free (warranty ranges from 1 to 5 years with increasing cost proportionally).  The cost of Comprehensive Maintainace Contract (C.M.C.) should be fixed initially in the Purchase Order (P.O.) and should cover the replacement of damaged consumables also (if not all, then at least one per year, free of cost).

The service contract or the Comprehensive Maintainace Contract should include at least three scheduled Preventive Maintainance per year and unlimited breakdown calls. The uptime should also be fixed at the time of purchase (preferably 98%) and the turn around time should be fixed to maximum 24 hours (including non working hours also).and the delivery time of the machine in the initial case should also be finalised.

The price fixed for the purchase should be inclusive of cost of equipment, excise/custom duty, sales tax, freight (to site), insurance (to site), installation, training and the warranty as discussed.  The buyer should provide the firm with form 32 if required for transport purpose and should ensure of complete training attained by the technicians and other user staffs before signing the installation report.

Mohammad Ameel

Biomedical Engineer

Era's Lucknow Medical College & Hospital