In the largest overseas deal by an Indian healthcare provider, hospital chain Fortis Healthcare has acquired private equity firm TPG Capital's 23.9-per cent stake in Singapore-based healthcare firm Parkway Holdings for about $685.3 million (Rs3,100 crore).

South-east Asia's largest healthcare provider, Parkway Holdings has a network of 16 hospitals with 3,400 beds spread across six countries, including India in Bangalore and Mumbai.

The deal, which values Parkway shares at S$3.56 each, a 14 per cent premium to its Thursday closing price at the Singapore Stock Exchange of S$3.12, will catapult Fortis Healthcare into the biggest hospital chain in Asia, with 62 hospitals having more than 10,000 beds.

It is also the largest acquisition made by Fortis, which has spent Rs909 crore to acquire10 hospitals from Wockhardt in August 2009. (See: Fortis acquires 10 Wockhardt hospitals for Rs909 crore)

After buying 5 Escorts Hospitals in 2005 for around Rs585 crore, it had acquired a 48.83-per cent stake in Chennai-based Malar Hospital last year.

The acquisition will make the Delhi-based Fortis the largest shareholder in Parkway, marginally ahead of the 23.32-per cent stake held by Malaysia's sovereign wealth fund, Khazanah Nasional Bhd.

Fortis intends to seek four seats on the board of directors of Parkway and nominate Malvinder Mohan Singh, the current chairman of Fortis as the chairman of the board of directors of Parkway.

Former Ranbaxy bosses, brothers Malvinder and Shivinder Mohan Singh, the promoters of Fortis Healthcare, have been sitting on a cash pile of over Rs10,000 crore after selling their stake in Ranbaxy to Daiichi Sankyo of Japan in October 2008, and had said in January that they aim to make quick acquisitions in order to enhance Fortis revenues from the current $350 million to $1 billion by 2015.

In December, Fortis was negotiating with Sri Lanka's largest private health care provider, the Asiri Group of Hospitals to acquire its four hospitals and had teamed up last year with industrial group CIEL to acquire a controlling stake in the 120-bed Clinique Darne, the largest hospital in Mauritius for $7 million, with both goups having invested $3.5 million each.

Parkway, listed on the Singapore Stock Exchange, has a market cap of $2.4 billion. Its hospitals are located across Asia including Singapore (1,022 beds), Malaysia (1,900 beds), Brunei (20 beds), India (425 beds), China (14 beds) and the UAE (260 beds).

Parkway Life REIT, with a market cap of $564.3 million is Asia's largest healthcare real estate investment trust (REIT) and is also a part of Parkway Holdings. Listed on the Singapore Exchange in August 2007, Parkway Life REIT invests in income producing real estate or real estate related assets in the Asia Pacific region that are used primarily for healthcare and/or healthcare-related purposes.

In January 2010, Parkway signed a Memorandum of Understanding with GM Modi Hospital & Research Centre for Medical Sciences to provide project management and consultancy services for the proposed renovation and expansion of the 100-bed GM Modi Hospital in New Delhi.

It also has a joint venture with Fortis arch rival Apollo Hospitals for Kolkata's Apollo Gleneagles Hospital and a joint venture with Koncentric Investments Ltd to develop a greenfield hospital in Mumbai.

However, the deal will enable Fortis to establish a Pan-Asian presence increasing its network to 62 hospitals with combined bed strength of over 10,000 beds. This will also impart it with a strategically meaningful position in Singapore, Malaysia and India and provide it with a platform to focus on Pan-Asia and the GCC region for future growth.

Shivinder Singh, managing director of Fortis said, ''The acquisition of a strategic stake in Parkway will give the combined entity the benefit of an unparalleled medical talent pool in Asia and also access to best in class practices thus creating synergies that will help offer a global quality healthcare experience across the region.''

Fortis, which currently operates and manages 46 running hospitals (including 13 satellite/heart command centres) in India, had posted a consolidated net profit of Rs2,275 crore in the third quarter ended 31 December 2009.

Fort Worth, Texas-based TPG Capital, one of the world's largest private equity  investment firms with $50 billion assets under management, has recouped nearly double its initial investment in Parkway.

TPG, which had acquired the stake in Parkway between 2005 and 2008 with a total investment of around $358 million, will make a profit of $272 million plus dividends.