MEET THE MAN BEHIND THE MEGA KIMS DEAL

How Dr M.I. Sahadulla built a hospital network that had the Blackstone group swooping in

- Nidheesh MK

Until about a fortnight or so ago, very few people outside Kerala, or those who did not have roots in the state, had heard about the Kims hospital chain or Dr Mohammed Illias Sahadulla, 78, its cofounder. Blackstone Group Inc changed that on 30 October.

In a layered transaction, the $1 trillion private equity investor invested in Care Hospitals, another South India-based hospital chain, and Care, in turn, invested in Kims Healthcare Management Ltd. The deal created one of India’s biggest hospital chains, worth over a billion dollars, pending legal procedures, Mint had reported.

Together, Kims and Care have 4,000 beds in 23 hospitals in 11 southern towns. The deal also offers a blockbuster exit for homegrown private equity firm True North, which effectively holds a 43% stake in Kims today, according to one person involved in the deal. He didn’t want to be identified. True North reportedly invested $200 million in Kims in 2017.

Sahadulla started Kims with his brother and businessman E.M. Najeeb in 2002. The founders, their family members and friends own 30% of the company. Apart from True North, some family members and friends, who were early investors, are also exiting the company. But the management is expected to remain the same, except for a board seat for Blackstone, according to the person cited above.

“The deal gives True North and other early investors a good exit. Some will gain 32x their investments," the person said.

WHO IS DR SAHADULLA?

A major reason the big players were drawn to the southern hospital network is Dr Sahadulla, a man who looks more like an athlete than a doctor, thanks to his active life and years playing tennis and badminton. He has a unique story, clean books, an ethical attitude to healthcare, and top environmental, social, and governance (ESG) practices, said Satish Chander, a partner at True North.